R01 Ethics frameworks, codes and embedding ethics: free practice questions

1. Question 1 of 5

   Which of the following must an adviser meet to be issued an SPS by an accredited body? 1. Adhere to the body's code of ethics 2. Hold the required qualifications 3. Complete the appropriate CPD

   Option A: 1, 2 and 3Option B: 1 and 2 onlyOption C: 2 and 3 onlyOption D: 1 and 3 only

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   The answer is A: 1, 2 and 3

   The adviser must adhere to the code of ethics, hold the right qualifications, complete appropriate CPD and comply with the relevant conduct standards.

   Why the other options are wrong

   B

   CPD is also required.

   C

   Adhering to the code of ethics is also required.

   D

   The right qualifications are also required.

2. Question 2 of 5

   Which of these is NOT one of the core duties in the CII/PFS Code of Ethics?

   Option A: Treat people fairly regardless of protected characteristicsOption B: Provide a high standard of serviceOption C: Act in the best interests of each clientOption D: Maximise the firm's profits for shareholders

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   The answer is D: Maximise the firm's profits for shareholders

   Profit isn't a core duty. The others are core duties, along with complying with the code and the law and acting with the highest ethical standards and integrity.

   Why the other options are wrong

   A

   Treating people fairly regardless of characteristics such as age or race is a core duty.

   B

   A high standard of service is a core duty.

   C

   Acting in each client's best interests is a core duty.

3. Question 3 of 5

   How does a firm's values statement relate to its ethics code?

   Option A: The values statement is the firm's detailed procedure manualOption B: The values statement sits above the code, setting a few key attributesOption C: The code sits above the values statement and replaces it entirelyOption D: They are the same document, simply given two different names

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   The answer is B: The values statement sits above the code, setting a few key attributes

   A values statement names a small number of key attributes, such as integrity or fairness. The ethics code links to these, and standalone policies give detailed guidance on specific issues.

   Why the other options are wrong

   A

   Detail sits in policies and procedures, not the values statement.

   C

   The values statement sits above the code, not the other way round.

   D

   They are separate documents with different roles.

4. Question 4 of 5

   According to the steps of leadership on ethics, where does setting an example come?

   Option A: It is the only step that mattersOption B: It replaces the need for an ethical visionOption C: It is one of five stepsOption D: It is only for the chief executive

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   The answer is C: It is one of five steps

   The five steps are: understand the language of ethics, craft a clear ethical vision, shape how people make decisions, remove hurdles to ethical decisions, and set an example. 'Tone from the top' is more than personal example.

   Why the other options are wrong

   A

   Setting an example is important, but only one of five steps.

   B

   A clear ethical vision is a separate step.

   D

   Managers at every level should set an example.

5. Question 5 of 5

   In a firm's oversight of ethics, what role does internal audit play?

   Option A: It checks independently that governance, risk and compliance workOption B: It handles and resolves all of the firm's customer complaintsOption C: It sells products to clients in an ethical and compliant wayOption D: It decides the ethical values that the whole firm should follow

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   The answer is A: It checks independently that governance, risk and compliance work

   Internal audit gives an independent check that governance, risk management and compliance are being carried out properly.

   Why the other options are wrong

   B

   Complaints handling is a separate function.

   C

   Internal audit doesn't sell products.

   D

   Values are set by leadership, not internal audit.

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