CFA Practice Question

There are 361 practice questions for this study session.

CFA Practice Question

A CFA charterholder has decided to revise her firm's written compliance manual. She checks with counsel regarding changes to applicable laws, rules, and regulations. She incorporates these changes as well as changes to the Code and Standards in the new version and distributes copies to her staff along with a memorandum. The memorandum states that the updated manual includes compliance procedures designed to meet industry standards, regulatory requirements, requirements of the Code and Standards, and the circumstances of the firm. According to the Standards of Practice Handbook, did the charterholder violate any Standard of Professional Conduct?

A. No
B. Yes, because compliance procedures may not be designed to meet industry standards.
C. Yes, because compliance procedures should not be altered to meet the circumstances of the firm.
Correct Answer: A

The charterholder committed no violation. According to Standard IV (C) Responsibilities of Supervisors, "adequate" procedures are those designed to meet industry standards, regulatory requirements, the requirements of the Code and Standards, and the circumstances of the firm. The standard requires that members with supervisory authority make reasonable efforts to prevent violations of applicable laws, rules, regulations, and the Code and Standards.

User Contributed Comments 2

User Comment
Inaganti6 She checked with the counsel too...
Smatouq But is she allowed to change code & standards?
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