8100 Professional Level Exam Professional Ethics and Compliance 2 — Questions and Answers
Question 1: What does 'confidentiality' obligate a certified professional to do?
- Protect client and organizational information from unauthorized disclosure (Correct answer)
- Share client information freely within the profession
- Publish findings from client engagements for professional development
- Retain client records indefinitely
Correct answer: Protect client and organizational information from unauthorized disclosure
Confidentiality requires that professionals safeguard sensitive information obtained during the course of their work and disclose it only as authorized or legally required.
Question 2: Under what circumstance may a professional legitimately disclose confidential client information?
- When required by law, court order, or to prevent imminent harm (Correct answer)
- Whenever a colleague requests it for professional reasons
- To demonstrate competence to a potential new client
- To settle a billing dispute with the client
Correct answer: When required by law, court order, or to prevent imminent harm
Legal mandates, regulatory requirements, and imminent safety threats are recognized exceptions to confidentiality obligations.
Question 3: What is 'professional indemnity' insurance designed to protect against?
- Claims arising from errors, omissions, or negligence in the delivery of professional services (Correct answer)
- Physical injury at a worksite
- Loss of personal property
- Damage caused by natural disasters
Correct answer: Claims arising from errors, omissions, or negligence in the delivery of professional services
Professional indemnity (also called errors and omissions) insurance covers legal defense costs and damages when a client claims professional negligence.
Question 4: What does 'due diligence' require of a professional before undertaking an engagement?
- Thoroughly investigating facts, risks, and relevant information before committing to conclusions or actions (Correct answer)
- Completing all work as quickly as possible
- Delegating complex tasks to assistants
- Charging a premium fee for high-risk work
Correct answer: Thoroughly investigating facts, risks, and relevant information before committing to conclusions or actions
Due diligence is the professional obligation to gather and review sufficient information before making decisions or recommendations.
Question 5: What is 'professional negligence' in a legal and ethical context?
- Failure to meet the standard of care expected of a competent professional in the same field (Correct answer)
- Making an honest mistake despite best efforts
- Working below market rate on a project
- Failing to meet an arbitrary internal deadline
Correct answer: Failure to meet the standard of care expected of a competent professional in the same field
Professional negligence occurs when a practitioner fails to apply the skill and diligence expected of a reasonably competent member of their profession, causing harm.
Question 6: What is the ethical obligation of a professional who discovers they lack the competence needed for an assigned task?
- Disclose the limitation and either obtain the needed expertise or decline the task (Correct answer)
- Proceed and do their best without disclosure
- Complete the task and disclose the limitation only if problems arise
- Charge a lower fee to offset the risk
Correct answer: Disclose the limitation and either obtain the needed expertise or decline the task
Professionals must practice only within their areas of competence; accepting work beyond one's competence without disclosure violates ethical obligations.
8100 Professional Level Exam Professional Ethics and Compliance 2
What does 'confidentiality' obligate a certified professional to do?