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MCQs on PROFESSIONAL ETHICS AND STANDARDS Part - 1

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Q.1:- A valuer shall refrain from being involved in any action that would bring disrepute to the …….

  • Business and profession
  • Business
  • Profession
  • Valuation
Check Answer

Correct Option: C

Q.2:- Which of the following is not included in valuation assignment?

  • Review
  • Due diligence
  • Audit.
  • All of the above
Check Answer

Correct Option: D

Q.3:- Valuer should not encouraged to adopt these policies and procedures:

  • Develop and adopt a code of ethics and make dear that unethical behaviour will notbe tolerated.
  • Check references of potential employees
  • Give employees a list of potential violations and sanctions, including dismissal.
  • Engage in any professional conduct involving that reflects adversely on professional reputation, integrity, or competence
Check Answer

Correct Option: D

Q.4:- When a Valuer uses hypothetical conditions during a valuation or calculation engagement, heor she should indicate the……………… for including the hypothetical conditions:

  • Purpose
  • Conclusion
  • Justification
  • Reason
Check Answer

Correct Option: A

Q.5:- Appropriate procedural safeguards help reduce threats to objectivity and counter any perception of possible bias. Which of the following is not procedural safeguards

  • Providing per-review of valuation, if necessary,
  • Act in a manner that is fraudulent;
  • Non-Disclosure of any possible source of conflict of interest,
  • Non-Disclosures of any prior association with the client,
Check Answer

Correct Option: A

Q.6:- Valuer should…………maintain professional knowledge and skill to provide competent, professional service based on up-to-date developments in practice, prevailing regulations/ guidelines and techniques:

  • Daily
  • Weekly
  • Continuously
  • Day to day
Check Answer

Correct Option: C

Q.7:- The Terms of Engagement, oral or in writing, shall clearly………………….. the nature, scope limitations of services to be performed and the responsibilities of the parties:

  • Include
  • Specified
  • communicate
  • Provide
Check Answer

Correct Option: B

Q.8:- Valuation conclusions can be presented as:

  • A single value
  • an estimate of value
  • A range of values
  • All of the above
Check Answer

Correct Option: D

Q.9:- Management Representation Letter is usually signed by a ………………of the management responsible for providing information to carry out the valuation:

  • Member
  • Trustees Senior
  • Senior member
  • Authorized person
Check Answer

Correct Option: C

Q.10:- An engagement letter is:

  • A written agreement
  • Defines the legal relationship between a client and professional company
  • Both (a) and (b)
  • None of the above
Check Answer

Correct Option: C

Q.11:- The scope of work includes information on

  • Identity of the valuer
  • Assets being valued
  • Identity of the client
  • All of the above.
Check Answer

Correct Option: D

Q.12:- Valuermust not accept direct and indirect additional compensation from a client and otherbenefits from third parties but not apply

  • Obtain written consent.
  • create a conflict of interest with stakeholder,
  • Additional Compensation with professional fee,
  • gifts, or consideration with fee,
Check Answer

Correct Option: A

Q.13:- Valuer must not keep information about current, former, and prospective clients confidential unless:

  • Disclosure is required by law,
  • The client or prospective client permits disclosure of the information.
  • The information concerns illegal activities on the part of the client,
  • None of the above.
Check Answer

Correct Option: D

Q.14:- Business ethics are not deals with

  • Reorganizing for right or wrong of business conduct.
  • Maintaining harmonious relationship with society.
  • Conducted according to ethics or moral standard.
  • Immorality in the business.
Check Answer

Correct Option: C

Q.15:- A valuer should provide services for remuneration which is charged in a……….manner isa reasonable reflection of the work necessarily and properly undertaken, and is not inconsistent with the applicable rules:

  • Fair
  • Transparent
  • Correct
  • Professional
Check Answer

Correct Option: B

Q.16:- If the work of a third party expert, such as a real estate or equipment appraiser, was relied upon in the engagement, a description of the reliance and level of Valuer's ………………………….. should be documented:

  • Opinion
  • Responsibility
  • Views
  • Perception
Check Answer

Correct Option: B

Q.17:- Which of the following is included in common threat to a professional valuer's ability to comply with the Fundamental Principles?

  • Self-review threat
  • Client conflict threat
  • Self interest threat
  • All of the above
Check Answer

Correct Option: D

Q.18:- ....................is a formal statement that acts as a guide for the ethics of how people within a particular organisation should act and make decisions.

  • Agreement of employment
  • Agreement for professional engagement
  • Code of ethics
  • None of the above.
Check Answer

Correct Option: C

Q.19:- To identify the appraisal problem, the valuer must ascertain:

  • the client and any other intended users with special assumptions necessary;
  • the intended use of the Report and any hypothetical conditions necessary in the appraisal;
  • the effective date of the valuer’s opinions and conclusions;
  • All the above.
Check Answer

Correct Option: D

Q.20:- A valuer should not use or divulge to other clients or any other party any confidential about the………………

  • Listed company
  • Private company
  • Subject company
  • Public company
Check Answer

Correct Option: C

Q.21:- A valuer shall not carry out any instruction of the client insofar as they are incompatible with the requirements of ……………………

  • integrity, unbiased and independence
  • integrity, potentiality and independence
  • integrity, objectivity and independence
  • integrity, subjectivity and independence
Check Answer

Correct Option: C

Q.22:- Scope of work describes:

  • The work to he performed
  • Responsibilities and confidentiality obligations of the client and the valuer respective
  • Limitation of the valuation engagement
  • All of the above
Check Answer

Correct Option: D

Q.23:- Why the valuer shall obtain ownership information regarding the asset to be valued?

  • To determine the type of ownership interest being valued and ascertain whether that interest exhibits control characteristics;
  • To analyze the different ownership interests of other owners and assess the potential effect on the value of the asset;
  • To understand the classes of equity ownership interests and rights attached thereto
  • All of the above
Check Answer

Correct Option: D

Q.24:- The Valuer should establish an understanding with the client, preferably in writing, regarding the………..to be performed:

  • Work
  • Exercise
  • Engagement
  • Task
Check Answer

Correct Option: C

Q.25:- Which is not including in Ethics?

  • Normal Ethics
  • Normative Ethics
  • Meta Ethic
  • Applied Ethics
Check Answer

Correct Option: A

Q.26:- A Valuer shall, in the conduct of his/its business, follow high standards of integrity and …………. in all his/its dealings with his/its clients and other valuers.

  • Judgement
  • Duties
  • Fairness
  • Objectivity
Check Answer

Correct Option: C

Q.27:- A valuer must not advertise or solicit in a manner that is misleading or otherwise contrary to the public interest. As

  • It is unethical to prepare or use in any manner a resume or statement of qualifications that is misleading.
  • It is ethical to utilize misleading advertising.
  • It is ethical to fail to disclose in the Report the payment by the valuer, or by an entity wholly or partially owned or controlled by the valuer, of a referral fee, in cash or kind, paid in connection with the procurement of a service.
  • It is ethical to solicit services in a misleading manner.
Check Answer

Correct Option: A

Q.28:- Which of the following describes the main purpose of corporate governance?

  • Ensure collective strategic decisions for a company.
  • Establish and monitor, operating parameters for a company
  • Establish short-term strategic objectives for a company.
  • Facilitate effective, entrepreneurial and prudent management of a company
Check Answer

Correct Option: D

Q.29:- A valuer shall maintain complete independence in his/its professional relationships and shall conduct the valuation independent of ………. .

  • Management influences
  • Internal influences
  • External influences
  • Client influences
Check Answer

Correct Option: C

Q.30:- Where a valuer has been convicted under 247(3), he shall be liable to—

  • Refund the remuneration received by him to the company;
  • Pay for damages to the company or to any other person for loss arising out of incorrect or misleading statements made in his report.
  • General punishments in sections 448 and 469 of the Act.
  • All of the above
Check Answer

Correct Option: D

Q.31:- A valuer shall endeavor to ensure that he /it provides true and adequate information and shall not …………………….. any facts or situations:

  • Hide
  • Disclose
  • Misrepresent
  • Fraud
Check Answer

Correct Option: C

Q.32:- Valuer should not use or divulge to other clients or any other party any confidential information about the subject company, which has come to his/its knowledge without proper and specific authority or unless there is a:

  • Ethical and professional right and duty to disclose
  • Moral and professional right or duty to disclose
  • Legal or professional right or duty to disclose
  • Moral and legal right or duty to disclose
Check Answer

Correct Option: C

Q.33:- The management representation letter serves to avoid any…………………or misrepresentation and Misunderstanding also protects the valuer in case the valuation is challenged at a later stage by any party:

  • Conflict
  • Misunderstanding
  • Ambiguity
  • Confusion
Check Answer

Correct Option: B

Q.34:- A valuer shall not use or divulge to other clients or any other party any confidential information about the company.

  • Client
  • Unlisted
  • Subject
  • Public
Check Answer

Correct Option: C

Q.35:- Maintaining professional knowledge and skill at a level required to ensure that a client or employer receives the advantage of competent professional service based on up-to-date developments in practice, legislation and techniques is

  • Confidentiality
  • Professional competence and due care
  • Professional behavior
  • Objectivity
Check Answer

Correct Option: B

Q.36:- A valuer shall not use or divulge to other clients or any other party any confidential information about the subject company, which has come to his/its knowledge without

  • Unless there is a legal or professional right or duty to disclose.
  • A legal obligation to do so by statute, ordinance or court or regulatory order;
  • Proper and specific authority specifically authorized for that purpose.
  • All of the above
Check Answer

Correct Option: D

Q.37:- A valuer shall carry out professional services in accordance with the technical and professional standard that may be specified…………………….

  • By IBBI
  • As on date
  • Time to time
  • In Companies Act
Check Answer

Correct Option: C

Q.38:- Valuer shall be responsible to present correct as well as adequate information without misrepresentation of any facts, figures, or scenarios and included

  • Valuers will indulge in any activity / action that could bring disrepute to the profession.
  • They shall maintain the dignity of their profession at all times.
  • Valuer's possessing strong moral principles and doing the right things in a highlyreliable manner.
  • The valuers shall conduct any investigation with integrity, reporting and evaluating facts with objectivity.
Check Answer

Correct Option: A

Q.39:- Which is/are the fundamental principle of the code of conduct?

  • Objectivity
  • Professional Competence and due care
  • Integrity
  • All of the above
Check Answer

Correct Option: D

Q.40:- It is unethical for valuer to knowingly:

  • Transmit a Report containing an analysis, opinion or conclusion that reasonable valuers would not believe to be justified.
  • Transmit a Report containing an analysis, opinion or conclusion that reasonable valuers would not believe to be justified.
  • act in a manner that is fraudulent;
  • All of the above
Check Answer

Correct Option: D

Q.41:- If valuation services are performed for a……………for which the Valuer or Valuer's firm also performs an attest engagement like audit, review, compilation engagement etc. the Valuer should consider whether it is appropriate to accept valuation engagement or not:

  • Organization
  • Company
  • Client
  • Business
Check Answer

Correct Option: C

Q.42:- A professional valuer is expected to comply with which of the following ethical principles:

  • Objectivity
  • Competence
  • Integrity
  • All of the above
Check Answer

Correct Option: D

Q.43:- Most important evidence in case of dispute

  • Working papers
  • Working papers and Management Representation Letter
  • Management Representation Letter
  • None of the above
Check Answer

Correct Option: B

Q.44:- In the preparation of a valuation report, the valuer shall not disclaim liability for his/its expertise or deny his/its………….except to the extent that the assumptions are based on statements of fact provided by the company or its auditors or consultants or information available in public domain and not generated by thevaluer.

  • Duty
  • Duty of diligence
  • Duty of care
  • Duty of valuation
Check Answer

Correct Option: C

Q.45:- A valuer shall carry out professional services in accordance with the relevant ………….. standards that may be specified from time to time

  • Professional
  • Technical and professional
  • Legal and professional
  • Technical
Check Answer

Correct Option: B

Q.46:- A valuer Confidential Information mean information that is either:

  • Classified as confidential or private by applicable law or regulation.
  • Information or documents identified by the client as confidential when providing it to a valuer ;
  • client as confidential information which is not available from any other source;
  • All of the above.
Check Answer

Correct Option: D

Q.47:- A valuer shall ………………maintain professional knowledge and skill to provide competent professional service based on up-to-date developments in practice, prevailing regulations/guidelines and techniques.

  • Normally
  • Periodically
  • Continuously
  • Regularly
Check Answer

Correct Option: C

Q.48:- Management Representation Letter should betaken:

  • prior to the issuance of the final report
  • at the time of issuance of the final report
  • After the issuance of the final report
  • None of the above
Check Answer

Correct Option: A

Q.49:- Most important evidence in case of dispute

  • Working papers
  • Management Representation Letter
  • Working papers and Management Representation Letter
  • None of the above
Check Answer

Correct Option: C

Q.50:- Valuer must not involve any activities which may constitute a violation which does not include:

  • Disclosure is required by law,
  • Misappropriation of client document
  • Misuse of confidential information.
  • Misappropriation of valuation secrets.
Check Answer

Correct Option: A