CFA Level 1 Volume 1 Schweser Practice Exam 2008 - Answer 3pm
Michaels has violated Standard IV(C) Responsibilities of Supervisors which requires him to make reasonable efforts to detect and prevent violations of compliance procedures. Simply making employees aware of the rules is not enough. Monitoring of employee trades, duplicate confirms, establishing blackout periods, or pre- clearance of employee trades are all methods that would have revealed the problem prior to the external audit. Your answer: D was correct! Your answer: D was correct!