Sometimes I feel like these mocks confuse me more than they help. I had the below question
Judey Dudley, CFA, is an analyst and plans to visit a company that she is analyzing in order to prepare a research report. The Standard Related to Independence and Objectivity:
1.requires Dudley to pay for her own transportation costs and not to accept any gifts or compensation for writing the report, but allows her to accept accomodations and meals that are not lavish
2.requires Dudley not to accept any compensation for writing the report , but allows her to accept company paid transportation , lodging and meals
3.allows Dudley to accept transportation, lodging, expenses and compensation for writing the research report , bur requires that she disclose the such an arrangement in the report.
I’m confused as to how its not number 1, is it because it says she’s not accept compensation for writing the report? Furthermore, in the answer key is says you CAN accept transportation and that’s whats throwing me off the most… I know you are allowed to accept accommodations but I thought when it came to travel, unless it was a real inconvenience (which in this case it does not sound like it) the analyst should always pay it themselves to maintain their objectivity.
The first point why I would say 1 is wrong is because Standards require disclosure of compensation for writing report, not refusal of compensation for writing report.
The second point about the transportation is, best practice would be for the member to pay for accommodations/travel, however I believe this is an important distinction between best practice and requirements. The member can accept the accommodations, which were provided for a business trip and not lavish hospitality.
Thanks sas525, the more I thought about it I guess 3 IS the most correct answer when you factor in refusal of compensation… These Ethics questions are more about reading comprehension sometimes than actual knowledge. I’ve heard recommendations of saving it to the last part so that you can give it either the time it deserves if you are ahead of schedule, or treat it like the crapshoot it is other times… I was really confident of my knowledge on the Ethics side heading into it but sometimes I feel like its a crap shoot anyways, any thoughts from previous writers on what methods they preferred?
I agree with sas525: the Standards recommend to pay for transportation (‘best practice’) but it is not forbidden to accept it. Big difference, at least that’s how I understood.