Ethics and Professional Responsibility Flashcards
7 cards from real CIMA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethics and Professional Responsibility flashcards as text
A CIMA professional at a large institution is instructed by their supervisor to omit a material risk from client reports to prevent client attrition. The professional should:
Answer: Refuse to comply and escalate the issue to compliance or senior management
Following instructions to omit material information would make the professional complicit in a client disclosure violation; refusing and escalating is required.
In the context of CIMA ethics, which best characterizes the 'Standard of Care' owed to retail investors versus institutional investors?
Answer: Retail investors receive a higher level of protection because they are presumed less sophisticated
Retail investors are presumed to be less financially sophisticated, so the standard of care, particularly around suitability and disclosure, is generally higher for them.
An investment manager soft-dollars commissions to pay for economic research that benefits multiple client accounts. This practice is ethical only if:
Answer: The practice is fully disclosed to clients and the research legitimately aids investment decisions
Soft-dollar arrangements are permissible when disclosed to clients and when the research directly benefits investment decision-making for the clients involved.
A CIMA professional overhears two corporate officers discussing an unannounced merger in a restaurant. Under CIMA ethics, the professional should:
Answer: Report the conversation to compliance and refrain from trading until the information is public
Information is considered material nonpublic information regardless of how it was obtained; trading on it or tipping clients is prohibited.
Which of the following is the most appropriate way for a CIMA professional to handle a situation where personal values conflict with a client's legal investment mandate?
Answer: Withdraw from managing the account after providing reasonable notice if the conflict cannot be resolved
When personal values fundamentally conflict with a legal client mandate, the ethical course is to withdraw from the relationship with proper notice rather than imposing personal views.
A CIMA certificant represents on their continuing education form that they completed a required ethics course they did not actually finish. This is a violation of which standard?
Answer: Integrity and Honesty
Falsifying professional development or certification records is a direct violation of the integrity and honesty standard, which prohibits all forms of deception.
When a CIMA professional discovers that a colleague is violating the Code of Professional Responsibility, the professional's primary obligation is to:
Answer: Report the violation to appropriate supervisors or compliance personnel
CIMA professionals are obligated to report known violations by colleagues through appropriate internal channels to uphold the integrity of the profession.