CFA Practice Question
Phyllis Majors covers auto industry for Green Tull Research Services. She regularly travels to industry conferences, which are sponsored by the industry association but are paid for by one firm or another.
A. Phyllis may be in violation of Standard I (B) - Independence and Objectivity.
B. Phyllis has not violated any standard since she is only doing her job and industry conferences help her write better reports which benefits her clients. Besides, she has not received any monetary compensation yet.
C. Phyllis maybe in violation of Standard VI (A) - Disclosure of Conflicts to Employer.
Explanation: While attending industry conferences may certainly be informational and educational, there is a risk that Phyllis's acceptance of the trade association's payment for travel, lodging, and meal expenses may jeopardize her independence and objectivity. Phyllis should disclose her attendance to her employer and have them pay for her expenses, failing which she should cut back on such conferences.
User Contributed Comments 6
| User | Comment |
|---|---|
| copus | There is always the risk that there repeated trips could affect her objectivity and independence. |
| manju79 | Trips not paid by same firm all the time? |
| Mikehuynh | Best practice is to pay all the related expenses to protect objectivity and independence |
| siggarusfigs | "may be"... There is another question like this, but they explicitly say that the accommodations some analyst receives at some convention/trip are "modest"-- the analyst was not violating the standards in that case. |
| Lambo83 | It doesn't state she has had her travel and accommodation paid for. |
| jstid40 | What does "Paid for by one firm or another mean"? Is this included simply to say that her firm does not always pay for travel and therefore we are to assume that someone else paying for her travel other than her firm is a violation of the Code and Standards? |