Chartered Investment Manager (CIM) Practice Exam · Question
A Canadian CIM professional discovers a material error in a client's financial statements received from the client. What is the most appropriate ethical action to take?
CIM professionals have a duty of care and ethical obligation to inform clients of material errors and address them promptly, ensuring decisions are based on acc
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Question: A Canadian CIM professional discovers a material error in a client's financial statements received from the client. What is the most appropriate ethical action to take?
Answer options:
- Ignore the error if it benefits the client's investment performance.
- Correct the error without informing the client to avoid embarrassment. ✅ Inform the client immediately and discuss the implications and necessary corrections.
- Proceed with investment decisions based on the erroneous statements until corrected by the client.
Correct answer: Inform the client immediately and discuss the implications and necessary corrections.
Explanation: CIM professionals have a duty of care and ethical obligation to inform clients of material errors and address them promptly, ensuring decisions are based on accurate information.
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