Reading 2-I: Standards of Professional Conduct & Guidan

white, course, outside, believe, director

Q5. Georgia Jones, CFA, is an analyst for Johnson, Thomas & Co. She also serves as an outside director for Dewey Manufacturing, Inc. In the course of her duties, she begins to believe that Dewey’s income statement for the most recent period may have been misstated. Georgia should do all of the following EXCEPT:

A) consult with Dewey Manufacturing's legal counsel.

B) consult with Johnson, Thomas' legal counsel.

C) inform the Securities and Exchange Commission.

Q6. A member who suspects that a colleague is violating the law should most appropriately:

A) report the illegal activity to the appropriate regulatory agency.

B) consult with the company counsel to determine if in fact a law is being violated.

C) report the illegal activity to CFA Institute Professional Conduct Program for action.

Q7. Deloris Johnson, CFA, suspected that her intern, who was working without pay at her brokerage firm, had violated a federal securities regulation. Johnson discussed the matter with her company's legal counsel who said that the intern's conduct was illegal. According to the CFA Institute Code and Standards of Professional Conduct, Johnson can dissociate herself from this illegal activity by:

A) transferring supervision of the intern to another person.

B) telling her intern to stop such conduct.

C) reporting the activity to the appropriate authorities.

Q8. CFA Institute believes:

A) that a minimum level of professional responsibility and conduct dictates that members be aware of and comply with laws, rules, and regulations governing their conduct.

B) that a maximum level of professional responsibility and conduct dictates that members be aware of and comply with laws, rules, and regulations governing their conduct.

C) that firms should comply with all domestic laws and regulations and that these laws also govern behavior in foreign markets, regardless of foreign laws and requirements.