Question
You are hired by a company to do a financial analysis of that company. Since the company that you are analyzing will be paying you,
You are hired by a company to do a financial analysis of that company. Since the company that you are analyzing will be paying you, there is a clear conflict of interest. With regard to the CFA Standards of Practice, indicate which of the following is true (T) and which is false (F).
Because of the conflict of interest, this type of relationship is not permitted.
You are permitted to accept this work but you must disclose the nature of compensation in the report.
You may accept stock as compensation so long as it is disclosed in the report.
Your compensation can not depend upon the favorability of the report.
You cannot issue a buy or sell recommendation in the report.
The CFA standards suggest that compensation be based upon a flat fee negotiated before the financial analysis is performed.
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