CMM Professional Ethics & Standards Flashcards

What is the ethical obligation of a CMM who discovers that an operator has been underpaying royalties to their client?

Answer: To promptly inform the client and advise them of their options for seeking correction or recovery

The CMM's duty of loyalty and candor requires immediate disclosure to the client of discovered underpayments and advice about available remedies, including audit rights and legal action.

Which of the following best describes the CMM's duty of 'diligence'?

Answer: Pursuing the client's matter with reasonable promptness and follow-through without unnecessary delay

Diligence requires the CMM to handle client matters with reasonable promptness, persistence, and follow-through, avoiding procrastination or neglect that harms the client's interests.

How should a CMM handle a situation where a client instructs them to take an action the CMM believes is unethical or illegal?

Answer: Advise the client of their legal and ethical concerns and, if the client insists on the improper action, withdraw from the engagement

When a client demands unethical or illegal action, the CMM must clearly communicate the concern and, if the client persists, must withdraw rather than participate in improper conduct.

Under NARO's CMM standards, what is the proper basis for a CMM's professional fee?

Answer: Fees must be reasonable and agreed upon in advance, and should not be contingent on outcomes in ways that compromise the CMM's independent judgment

Professional fee standards require advance agreement on reasonable compensation and prohibit fee structures that create incentives for the CMM to compromise their independent professional judgment.

What distinguishes a CMM's professional responsibility from that of an unlicensed mineral consultant?

Answer: CMMs are bound by a formal code of ethics, continuing education requirements, and certification standards that unlicensed consultants are not

The CMM designation imposes formal professional obligations including an enforceable code of ethics, mandatory continuing education, and certification standards that distinguish credentialed from uncredentialed practitioners.

A client asks their CMM to help evaluate whether to accept a lease bonus offer. The CMM's spouse works for the company making the offer. What must the CMM do?

Answer: Fully disclose the relationship to the client and either obtain informed written consent to continue or withdraw from advising on this transaction

A family relationship with the counterparty creates a material conflict of interest requiring full disclosure to the client and informed written consent before the CMM may continue advising on the transaction.