CPH Exam 230 Questions with Verified Answers
When are suitability requirements not applicable? - CORRECT ANSWER For brokers who do not provide
... [Show More] investment advice or operate as a separate legal entity
How is a new product approved? - CORRECT ANSWER After review from the New product Committee
What are the ethical principles for a code of ethics? - CORRECT ANSWER Trust, integrity, justice, fairness, and honesty
What are the 5 Standards of Conduct? - CORRECT ANSWER Duty of Care, Trustworthiness, Honesty, and Fairness, Professionalism, Conduct in Accordance with Securities Acts, Confidentiality
What falls under the Standard of Duty of Care? - CORRECT ANSWER KYC, Due Diligence, Unsolicited Orders
What falls under the Standard of Trustworthiness, Honesty, and Fairness? - CORRECT ANSWER Priority of Client Interests, Protection of Client Assets, Complete and Accurate Information, Disclosure
What falls under the Standard of Professionalism? - CORRECT ANSWER Client Orders, Trades by Registered Individuals, Approved Securities, Personal Financial Dealings with Clients, Personal Trading Activity, Continuous Education
What falls under the Standard of Conduct of Conduct in Accordance with Securities Acts? - CORRECT ANSWER Inside Information
What falls under the Standard of Confidentiality? - CORRECT ANSWER Client Information, Use of Confidential Information
When can SRO's and commissions share information? - CORRECT ANSWER If it is in an investigation
What are the fines under the Personal Information Protection and Electronic Documents Act? - CORRECT ANSWER $10,000 to $100,000
Where does the Personal Information Protection and Electronic Documents act not apply due to similar legislation? - CORRECT ANSWER BC, Alberta, and Quebec
What is the main mandate of securities regulators? - CORRECT ANSWER Promote the Integrity of the Markets and Ensure Investor Protection
What are the 3 principles of securities regulation? - CORRECT ANSWER Disclosure, Registration, Enforcement
What is the maximum penalty for offences under the Ontario Securities Act? - CORRECT ANSWER Fine of 5 million and a 5 year prison term, additionally provinces can order repayment of $100,000 to investors
What is the Disciplined Persons List? - CORRECT ANSWER A list of those who have been sanctioned for market misconduct
What is the integrated Market Enforcement Team? - CORRECT ANSWER Cooperative effort between the RCMP and the Federal government
What is the Joint Serious Offences Team? - CORRECT ANSWER Joint effort between the OSC and the RCMP
What is the CSA? - CORRECT ANSWER Overseer of securities regulators that meets quarterly in person and monthly by conference call
What is SEDAR? - CORRECT ANSWER Electronic filing system for regulatory filings
What is SEDI? - CORRECT ANSWER Insider reports
When should trades be reported to SEDI? - CORRECT ANSWER Within 5 days
When should event reports be reported to SEDI - CORRECT ANSWER Within 1 business day
What is the NRD? - CORRECT ANSWER Database for registration that applies across Canada
What is an AFR? - CORRECT ANSWER Authorized Firm Representative, must submit information to the NRD
When must a change regarding firms or individuals be submitted to the NRD? - CORRECT ANSWER Within 10 days of the change
When must a change regarding citizenship or employment be submitted to the NRD? - CORRECT ANSWER Within 30 days
What is the policy for short-term disability leaves with the NRD? - CORRECT ANSWER Any supervisory position leaves must be reported, but for regular employees nothing less than a 3 month leave must be reported
When must termination of employment be reported to the NRD? - CORRECT ANSWER Within 10 days
When must material changes to registrants be reported to the NRD? - CORRECT ANSWER Within 10 days
When must material changes to registrants be reported to the employer? - CORRECT ANSWER Within 2 business days
What is the CTO National Database? - CORRECT ANSWER Keeps a list of companies who have failed to meet disclosure requirements and prohibits trading in those securities
How can you check the registration of any firm or individual? - CORRECT ANSWER The NRS (national registration search)
What is a National Instrument? - CORRECT ANSWER Has been adopted by all CSA jurisdictions
What is a multilateral instrument? - CORRECT ANSWER Has not been adopted by one or more CSA jurisdictions
What is the AMF's Financial Services Compensation Fund? - CORRECT ANSWER Reimburses victims of fraud in Quebec up to $100,000
What 2 organizations merged to create IIROC? - CORRECT ANSWER Investment Dealers Association and Market Regulation Services
What is the Investment Industry Association of Canada? - CORRECT ANSWER An organization that attempts to grow the industry. Not a regulatory body
What are the 4 goals of the Investment Industry Association of Canada (IIAC)? - CORRECT ANSWER Advocacy, Industry Profile, Member Support, and Market Advancement
How are Mutual Funds regulated in Quebec? - CORRECT ANSWER AMF regulates the mutual fund industry while CHAMBRE sets CE requirements and a code of ethics
What is the MFDA IPC? - CORRECT ANSWER Covers $1 million per account after insolvency of a MFDA member
How does registration work for a mutual fund that operates in both Quebec and another jurisdiction? - CORRECT ANSWER There is an agreement so that regulatory duplication will not occur
What is the CDIC? - CORRECT ANSWER Insures accounts and GIC's with a term of 5 years or less up to $100,000 per institution
What is the QDIC? - CORRECT ANSWER CDIC for Quebec
What is the CIPF? - CORRECT ANSWER Canadian Investor Protection Fund, protects against failure of any SRO dealer member for up to $1 million per general account (cash margin, options) and separate account (registered accounts, half of each joint account owner)
How long do you have to file a claim with the CIPF? - CORRECT ANSWER 180 days
What is unique about the Montreal exchange? - CORRECT ANSWER Allows for restitution of funds lost from misconduct
What is the ICE Futures exchange? - CORRECT ANSWER Deals in agricultural derivatives
What is Regulation S? - CORRECT ANSWER Allows for registration requirements with the SEC to be bypassed
What are the 3 stages of money laundering? - CORRECT ANSWER Placement, Layering (obscuring audit trail through complex transactions), Integration (placing funds back into the economy so they appear to be legitimate, e.g. real estate)
How does money laundering work across jurisdictions? - CORRECT ANSWER Often uses multiple transactions across multiple jurisdictions and financial institutions
How do AML compliance programs work? - CORRECT ANSWER Must be audited every 2 years, and findings of money laundering must be reported in writing to an RCMP officer within 30 days
What are the penalties for wilful blindness and failing to report suspicious transactions? - CORRECT ANSWER 5 years in prison or a fine of $2 million
What are the penalties for knowingly participating in money laundering? - CORRECT ANSWER 10 years in prison, and FINTRAC can fine entities up to $500,000
What is FINTRAC? - CORRECT ANSWER Collects an discloses information to assist in the detection of money laundering
What are the 3 choke points of money laundering? - CORRECT ANSWER Entry into financial system, transfers, cross-border flow of cash
How long can PEP accounts be open for? - CORRECT ANSWER 30 days unless senior management approves further
What is the goal of industry titles? - CORRECT ANSWER More transparency for clients
What are carrying brokers? - CORRECT ANSWER They offer back office services to introducing brokers while introducing brokers only maintain the relationship with client
When does the carrying broker have a KYC obligation and compliance with non-financial requirements? - CORRECT ANSWER Jointly responsible with Introducing broker in a type 1 relationship, but in all other types the introducing broker is responsible for all compliance and KYC
Do private investment clubs require registration? - CORRECT ANSWER Only if there are more than 50 members
When do you not have to register with an SRO? - CORRECT ANSWER If you are dealing in specified debt, or if advice does not relate to securities and all clients are permitted clients (corporations with $25 million in assets or individuals with $5 million in assets)
Where can you not advertise that you are registered? - CORRECT ANSWER Newfoundland and Labrador
What is the IIROC CE program? - CORRECT ANSWER 10 hours of compliance training for IR's and RR's, 20 hours of professional development training for RR's
What is the IIROC term for an IA? - CORRECT ANSWER RR
What is the IIROC term for an associate? - CORRECT ANSWER IR
What is the registration process for an RR (IA)? - CORRECT ANSWER CSC within past 3 years, CPH within past 2 years, 90 day period of restricted client contact, 6 month period of supervision, 30 month requirement (WME), CE
What is the registration process for an IR (Associate)? - CORRECT ANSWER CSC within past 3 years, CPH within past 2 years, 30 day period of restricted client contact, potential 6 month period of supervision, compliance portion of CE
What can you do during the period of restricted client contact? - CORRECT ANSWER Send out letters, invite public to seminars, create lists of potential clients, gather info from existing or prospective clients on behalf of another RR, forward non-securities specific information
What is the training period for Mutual Fund Representatives? - CORRECT ANSWER CSC and training program completed within 90 days with 6 month period of supervision after
How can you be dual licensed with Securities and Life Insurance? - CORRECT ANSWER Businesses is identified separately, written approval from securities employer, clients are aware they are dealing with 2 separate entities, complete LLQP
What is the period where registration can be transferred to another firm? - CORRECT ANSWER Within 90 days of prior employment
How long are courses valid for after leaving an IIROC dealer member? - CORRECT ANSWER 3 years
What is IIROC's 3 criteria for registration? - CORRECT ANSWER Integrity, Financial Solvency, Competence
What IIROC sanction is no longer accepted? - CORRECT ANSWER Voluntary supervision
How many clients can you have in another jurisdiction without registering in that jurisdiction? - CORRECT ANSWER 5 for an individual, 10 for a firm
How can you deal with US clients? - CORRECT ANSWER Pass Series 37/38/63 exams and register in state where US client resides and work for a dealer member that is registered in the US
What is the Blanket Model Exemption? - CORRECT ANSWER Distribution of TSX securities that are not listed on a US exchange
When can you still deal with someone who spends time in the US without registering in the US? - CORRECT ANSWER If they spend less than 183 days per year in the US
What are the 3 purposes of the NAAF? - CORRECT ANSWER Client investment objectives/risk tolerance, creditworthiness of teh client, industry regulations that apply to client/account
What must you obtain when opening a corporate account? - CORRECT ANSWER Name, address, and occupation of all directors and insider shareholders (10% for IIROC, 25% for PCMLTFA). If this information is not recorded within 6 months, account is restricted to liquidating trades and transfers out only
In a corporate account where beneficial owners are not known, what must occur? - CORRECT ANSWER Information on beneficial owners must be obtained within 1 year
What are the trigger events that trigger a NAAF review? - CORRECT ANSWER Trade is accepted, recommendation is made, securities are transferred, change of representative of account, material change to KYC, change in portfolio manager
Can PO boxes ever be used as a client's address? - CORRECT ANSWER No
What is the form you must sign before opening a cash account? - CORRECT ANSWER Cash agreement form
How do margin guarantees work? - CORRECT ANSWER Only an immediate family member can provide a guarantee (spouse, parent, sibling, or child)
What is the form you must sign before opening a margin account? - CORRECT ANSWER Margin Agreement
What is Delivery Against Payment? - CORRECT ANSWER Purchasing securities where you pay on settlement date
What is Receipt against Payment? - CORRECT ANSWER Sale of securities where you receive securities and then pay the client in full
What is the document Investment Club Accounts must sign? - CORRECT ANSWER Investment Club Agreement Document
What is a simple discretionary account and how long are they valid for? - CORRECT ANSWER Discretionary authority has not been solicited, only valid for 12 months (usually due to illness, etc)
How can you terminate a discretionary account? - CORRECT ANSWER Give 30 days notice by notifying the client in writing
What is a solicited trade? - CORRECT ANSWER IA contacts client with a trade idea
What is an unsolicited trade? - CORRECT ANSWER Client contacts IA with a trade idea
What is a control person? - CORRECT ANSWER Someone who owns 20% or more of the shares
What is an insider? - CORRECT ANSWER Someone who owns 10% or more of the shares
Who is exempt from insider reporting requirements? - CORRECT ANSWER Nominal vice presidents, and those who only trade mutual funds or educational plans
What happens when receiving a request for transfer of a client's account? - CORRECT ANSWER Asset list must be delivered within 2 days, and if transfer is unsettled within 10 days, the transfer can be completed by buying the unsettled portion or establishing a loan of the assets
What is Churning? - CORRECT ANSWER excessively trading to increase commision
What is bucketing? - CORRECT ANSWER confirming a transaction when no trade has been executed
What can be considered an institutional customer? - CORRECT ANSWER A non-individual with total securities exceeding $10 million
What is the penalty for violating the Do not Call list? - CORRECT ANSWER $1,500 for individuals and $15,000 for corporations
What is the penalty for anti spam legislation? - CORRECT ANSWER $10 million
When can you act as a principal? - CORRECT ANSWER If the price you give to the client is the best available at the time
Who is an associate of an insider trader? - CORRECT ANSWER A spouse, relative, etc
Who is an affiliate of an insider trader? - CORRECT ANSWER Someone in a company with common ownership with the insider
What is the maximum penalty for insider trading in Ontario? - CORRECT ANSWER Fine of $5 million and a 5 year prison sentence, OSC can also order an additional penalty of $1 million
What is the maximum federal penalty for insider trading and tipping? - CORRECT ANSWER 10 years for insider trading and 5 years for tipping
When should securities be put on a grey list? - CORRECT ANSWER I there are discussions with an issuer but no deal has been linked
When should securities be put on a restricted list? - CORRECT ANSWER When you are aware of insider information
What is the time period for filing insider reports? - CORRECT ANSWER 10 days for initial reports, 5 days for subsequent reports
What is paying with soft dollars? - CORRECT ANSWER When commission charges go to something else other than IA compensation (e.g. financial research)
How do mutual funds accept gifts? - CORRECT ANSWER Cannot accept any non-cash sales incentive, and travel expenses may not be apid for by fund cmopany
What % of ownership of a mutual fund must be disclosed? - CORRECT ANSWER Anything over 5%
What is the standard trading unit for a derivative? - CORRECT ANSWER 1 contract
What is the standard trading unit for a debt security? - CORRECT ANSWER $1,000
What is the standard trading unit for a t-bill? - CORRECT ANSWER $250,000
What is the standard trading unit for a provincial bond? - CORRECT ANSWER $25,000
What is the standard trading unit for federal bonds over 1 year? - CORRECT ANSWER $100,000
What is the standard trading unit for equities trading at less than $0.1 per unit? - CORRECT ANSWER 1,000 units
What is the standard trading unit for equities trading between $0.1 and $1.00 per unit? - CORRECT ANSWER 500 units
What is the standard trading unit for equities trading over $1.00 per unit? - CORRECT ANSWER 100 units
Do you pay a discount or premium for odd lots? - CORRECT ANSWER Discount
When do t-bills settle - CORRECT ANSWER Same day
What order expires at the end of the trading period if it is not executed? - CORRECT ANSWER Day Order
What order remains in effect until it is executed or cancelled? - CORRECT ANSWER Good till cancelled order
What order is valid until a specific expiry date? - CORRECT ANSWER Good till date order
What is an order to buy a security at a specified or better price? - CORRECT ANSWER Limit order
What is an order where a sale is triggered if the stock drops below a certain threshold? - CORRECT ANSWER Stop loss order
What is an order where a purchase is triggered if the stock moves above a certain level? - CORRECT ANSWER Stop buy order
What is an order where the entire amount of the order must be bought or it will not be executed? - CORRECT ANSWER All or none order
What is an order where as much as possible is filled at a certain price? - CORRECT ANSWER Fill or kill order
What is an order where a security is sold and the proceeds are used to purchase another security? - CORRECT ANSWER Switch order
What order is triggered after a primary order is filled? - CORRECT ANSWER Contingent order
How must you identify a pro order? - CORRECT ANSWER Mark it EMP, PRO, or N-C
What must be disclosed for fixed-income securities? - CORRECT ANSWER YTM
What must happen for all trades that do not have a change of beneficial ownership? - CORRECT ANSWER Must be executed off marketplace
When do restrictions on a cash account apply? - CORRECT ANSWER When the balance is outstanding for 20 business days (if less than 6 business days, securities given a weighted value, if more than 6 business days, treated as though they are margin accounts)
When do restrictions apply to a DAP or COD account? - CORRECT ANSWER If amount is owed for 5 or more business days
What is the max loan value extended for share price $2.00 and over? - CORRECT ANSWER 50%
What is the max loan value extended for share price $1.75-$1.99? - CORRECT ANSWER 40%
What is the max loan value extended for share price $1.50-$1.74? - CORRECT ANSWER 20%
For what price securities can loans not be given? - CORRECT ANSWER Any price under $1.50
What is the reduced margin %? - CORRECT ANSWER 70%
What is the margin requirement for unlisted securities? - CORRECT ANSWER 100% of market value
What is the short margin requirement for securities over $2.00? - CORRECT ANSWER 150% of value
What is the short margin requirement for securities between $0.25 and $1.49? - CORRECT ANSWER 200% of value
What happens if an under margined account is not covered within 20 business days? - CORRECT ANSWER Trading is restricted to only trades that reduce margin deficiency
How long must written correspondence with clients be maintained for? - CORRECT ANSWER At least 2 years
What is the Mutual Fund Smart Prospectus System? - CORRECT ANSWER Creates customized prospectuses for each investor that only contain information about the funds they have purchased
What is the standard performance data for money market yields? - CORRECT ANSWER Current yield or both current yield and effective yield
What is the Fund Facts document for a mutual fund? - CORRECT ANSWER 4 pages or less and provides investor with key information about a mutual fund
What are 3 requirements for a website? - CORRECT ANSWER Prior approval from a supervisor, approved hard copy of material on website must be maintained, and IIROC must approve all written procedures on supervision of the website
How do you go about jurisdictions on trades on the internet? - CORRECT ANSWER Must have a disclaimer saying that the securities are not available to particular jurisdictions
What must happen to first-time buyers of strip bonds? - CORRECT ANSWER Must be given an information document outlining the characteristics of strip bonds
When must a leverage risk disclosure statement be provided? - CORRECT ANSWER When a new account is opened, when a recommendation is made to purchase securities on margin, or when registrant becomes aware they have intended to purchase securities with borrowed funds (only has to be given every 6 months)
When must account statements be sent? - CORRECT ANSWER Quarterly, or if there is activity or futures contracts (or account is discretionary), monthly
What are segregated securities? - CORRECT ANSWER Fully paid securities held for the client but separate from their own securities
Which rate of return is used first? - CORRECT ANSWER Money-weighted, then time-weighted
What happens if securities are registered in the street name? - CORRECT ANSWER They are registered in the name of the dealer member, and held separate from the dealer member's inventory, can be held in safekeeping where physical certificates are stored
How long does the firm have to send a response to a complaint from a client? - CORRECT ANSWER 5 business days for acknowledgement, 90 days for a response
How long are complaint records held for? - CORRECT ANSWER 7 years
When must MFDA firms report any private complaint settlements? - CORRECT ANSWER If over $25,000 against a firm or $15,000 against an employee
What is ComSet? - CORRECT ANSWER Reports every public complaint
What are the options for proceeding with a complaint? - CORRECT ANSWER Arbitratino, Ombudsman, Civil Litigation, or Mediation (Quebec only and free of charge)
What is the maximum claim for arbitration? - CORRECT ANSWER $500,000
What are the characteristics of Ombudsman complaints? - CORRECT ANSWER Non-binding, but made public if firm does not adhere to recommendations, only used for claims below $350,000, must be submitted within 180 days
What is a reporting issuer? - CORRECT ANSWER Someone who has previously done an IPO and is issuing more securities
What is a control position? - CORRECT ANSWER Those who have 20% or more of securities, they must file a prospectus except in Quebec where no preliminary prospectus ever is required
What is a requirement of a Preliminary Prospectus? - CORRECT ANSWER Must have red ink on the cover saying it is not in its final form and the securities may not be sold until final prospectus is obtained
What is a market out clause? - CORRECT ANSWER Allows securities offering to be cancelled if market issues occur
What are rules regarding crowdfunding? - CORRECT ANSWER Head office must be in a participating jurisdiction, no person can invest more than $1,500 per distribution, no more than $250,000 can be raised, and must provide purchasers with right to withdraw within 48 hours
When is there restricted trading in a securities offering? - CORRECT ANSWER 2 days before the price is determined to prevent raising or lowering or price
What can occur during the Waiting Period between the preliminary and final prospectus? - CORRECT ANSWER Can solicit interest from potential purchasers, provide anyone with preliminary prospectus, advertise security, but cannot purchase other new issue securities
What must you do to all who have received a preliminary prospectus? - CORRECT ANSWER Keep a record of all the names
What is a private issuer? - CORRECT ANSWER Less than 50 shareholders, can be purchased without a prospectus
What is an offering memorandum? - CORRECT ANSWER Allows you to bypass dealer registration if under $10,000
When must the final prospectus be delivered? - CORRECT ANSWER Within 2 business days after a purchase has been made
When can you use a Short Form Prospectus? - CORRECT ANSWER If information is already widely available in the AIF and they file with SEDAR
What is the prospectus approval for securities on the venture exchange? - CORRECT ANSWER Prospectus is approved by the exchange rather than an administrator
What is a shelf distribution? - CORRECT ANSWER Distribution of securities without disclosure documents due to already having them out in public
When can an underwriter solicit investor interest in a bought deal? - CORRECT ANSWER 4 days before filing of preliminary prospectus
What is an accredited investor? - CORRECT ANSWER Financial institution, government, with over $5 million, or an individual where they and a spouse have assets over $1 million, have made over $200,000 in the past 2 years, or net income with a spouse is over $300,000 over the past 3 years
What does the Quebec Securities Act outline in regards to misrepresentations? - CORRECT ANSWER Can apply for an adjustment to the price paid
When must venture issuers file financial statements? - CORRECT ANSWER Interim: 60 days of year end, Audited: 120 days
When must senior issuers file financial statements? - CORRECT ANSWER Interim: 45 days of year end, Audited: 90 days
When must a material change report be filed? - CORRECT ANSWER Within 10 days of a material change
When must an acquisition report be filed? - CORRECT ANSWER Within 75 days
What is NOBO? - CORRECT ANSWER Ensures security owners receive proxy-related materials, must be sent 21 days before meeting date or 25 days before meeting date for beneficial owners
What is the early warning rule? - CORRECT ANSWER Anyone who accumulates over 10% of a security must file a press release immediately, and file a detailed report within 2 business days
What is a take-over bid? - CORRECT ANSWER An offer to acquire 20% or more of a target company
What happens if you acquire or dispose of more than 2% of securities? - CORRECT ANSWER Must file a press release
What is a take-over circular? - CORRECT ANSWER Provided to holders of all target securities in a take-over bid, discloses offeror's position
What is a director's circular? - CORRECT ANSWER Provides a recommendation on whether to accept or reject a take-over bid, must be provided within 15 days from date of the bid
What is the timeline for taking up securities in a take-over bid? - CORRECT ANSWER Must allow securities to deposited within 105 days after the take-over bid, and cannot take up any securities until a 35 day period has expired
What would be a poison pill in a take-over bid? - CORRECT ANSWER Implementing a shareholder's rights plan
What is a lock-up agreement? - CORRECT ANSWER An agreement to sell shares at a certain price to the offeror, must be filed the day of the bid
What is a coat-tail provision? - CORRECT ANSWER Allow shares that are not fully voting to have voting rights in a take-over bi
What is a normal course purchase? - CORRECT ANSWER A purchase of not more than 5% of the shares of a company over 12 months
What are rules for a take-over bid on an exchange? - CORRECT ANSWER Notice of intention must be given to the exchange, board of directors must recommend or reject bid within 7 days
What are the rules for other purchasers of securities during a take-over bid? - CORRECT ANSWER If anyone else purchases 5% or more of the securities, they must file a press release and further press releases for any more acquisitions of 2% or more
What are values? - CORRECT ANSWER How you live your life what you deem to be an acceptable idea
What is the law? - CORRECT ANSWER Concerned with actions that if violated have serious consequences to society as a whole, attempts to have society function for the greatest good for the greatest number of people
What is the time period of values? - CORRECT ANSWER Long-lasting beliefs but can change over time
What are ends values and means values? - CORRECT ANSWER Ends values are personal goals, and actions taken to meet ends values are means values
What is a unified value system? - CORRECT ANSWER Where the ends and means values mutually reinforce and support each other
What is value clarification? - CORRECT ANSWER Having knowledge of what values influence your decision making process
What are core values? - CORRECT ANSWER Values that require no justification other than they are right and central to your life
What are the 3 tests for Right vs Wrong? - CORRECT ANSWER Legal test, front page test, mom test
What are the 4 types of Right vs Right issues? - CORRECT ANSWER Truth vs Loyalty, Individual vs Group, Short term vs Long term, Justice vs Mercy
What are ethics? - CORRECT ANSWER Concerned with right and wrong behaviour, and are built upon values, how we relate to other people and act to other people, more to do with the day to day actions than the law, and encouraging actions that create trust, ethics are built upon values
How can ethics flourish in an organization? - CORRECT ANSWER Everyone must clearly communicate guiding beliefs and put them in place on a daily basis
What is ethical relativism? - CORRECT ANSWER The idea that there is no universal moral principle, destructive to society as it results in a "me-first" way of thinking
What do compliance based systems rely on? - CORRECT ANSWER Rules and mandates
What do Integrity based systems rely on? - CORRECT ANSWER Self-responsibility and accountability
What is the overlap between Compliance-based systems and integrity-based systems? - CORRECT ANSWER Fairness
What blanket do objectivity, competence, and prudence fall under? - CORRECT ANSWER Professional
What blanket do Fairness, integrity, and honesty fall under? - CORRECT ANSWER Ethical
What blanket do Professional, diligence, and privacy fall under? - CORRECT ANSWER Legal
What blanket do being prudent with others money, giving impartial advice, disclosing conflict of interest, etc fall under? - CORRECT ANSWER Acting in good faith
What is the main idea of duty of care? - CORRECT ANSWER Client's interests come first
How do Ethical practices occur? - CORRECT ANSWER Combining shared values with operational policies
Who do directors owe their primary duty to? - CORRECT ANSWER The corporation
What is the idea of the Sarbanes-Oxley act? - CORRECT ANSWER Firms should have an independent board of directors
What is the ethical decision making process? - CORRECT ANSWER Recognize there is a moral issue, determine whose moral issue it is, gather the facts, test for right vs wrong issues, test for right vs right paradigms, apply resolution principles, reflect on the process
What is ends-based ethical thinking? - CORRECT ANSWER Greatest good for greatest number of people, requires a cost-benefit analysis
What is rules-based ethical thinking? - CORRECT ANSWER Creates suitable rule for others to follow. Following principles that you would want everyone else to follow if they were in your position
What is social-contract based ethical thinking? - CORRECT ANSWER Creating harmonious relationships within the group
What is personalistic-based ethical thinking? - CORRECT ANSWER Decisions that create a situation that is authentic to who you are
When do you no longer have to act in good faith? - CORRECT ANSWER Client no longer wants services, another professional takes over responsibilities, or you give adequate notice to the client [Show Less]