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MCQs On PROFESSIONAL ETHICS AND STANDARDS Part - 3

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Q.1:- Which of the following statements about the model Code of conduct is most inaccurate misconducts?

  • Use of confidential information for valuation assignment.
  • Neglecting to perform due diligence when required is an example of misconduct.
  • A valuer’s commits misconduct by engaging in any illegal activity.
  • Misconduct applies only to a valuer’s professional activities.
Check Answer

Correct Option: A

Q.2:- A valuer must not violate confidentiality. It is unethical to disclose confidential information or an analysis, opinion or conclusion specific to a service to anyone other than:

  • the client and those persons specifically authorized by the client;
  • third parties, when and to the extent that there is a legal obligation to do so by statute, ordinance or court or regulatory order;
  • legal counsel, as reasonably necessary in the event of actual or threatened legal or regulatory action;
  • All of the Above.
Check Answer

Correct Option: D

Q.3:- Valuer/Valuation firm should specifically should give a…………….. in the report that for the particular task he has taken advice of an expert:

  • Views
  • Disclaimer
  • Suggestions
  • Undertaking
Check Answer

Correct Option: B

Q.4:- In developing an appraisal, a valuer must:

  • commit a substantial error of omission or commission that not significantly affects the assignment results; and
  • Make a series of errors that, considered individually, may not significantly affect the assignment results but which, when considered in the aggregate, establish that the appraisal is being rendered in a careless or negligent manner.
  • Not be aware of and understand methods and techniques that are necessary to producecredible assignment results;
  • All the above.
Check Answer

Correct Option: D

Q.5:- 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.6:- The valuation engagement may cover:

  • Fairness opinion which involves opining on the fairness of the price at which a transaction has taken place
  • Valuation review, where the work of another valuer is reviewed
  • Arriving at an estimate of / providing an opinion of value
  • All of the above
Check Answer

Correct Option: D

Q.7:- Which of the 'following is the responsibility of the client?

  • The terms of the engagement provide a reasonable framework to perform the valuation accordance with prescribed standards
  • The client should keep the valuer informed of any material development relating to business or operations which may have a bearing on the engagement
  • A client shall be responsible for the methods and assumptions used in valuation.
  • None of the above
Check Answer

Correct Option: B

Q.8:- A subsequent event is:

  • An event that occurs subsequent to the valuation date could affect the value
  • Indicative of the conditions that were not known or knowable at the valuation date, including conditions that arose subsequent to the valuation date
  • None of the above
  • Both (a) and (b)
Check Answer

Correct Option: D

Q.9:- Which of the following is correct statement?

  • The valuer should apply its professional judgment, to consider any of subsequent circumstances/events which are relevant for the valuation
  • In the event subsequent circumstances/events are considered by the valuer the same should be explicitly disclosed in the valuation report
  • None of the above
  • Both (a) and (b)
Check Answer

Correct Option: D

Q.10:- A valuer should not accept any fees or charges other than those which are disclosed approved by the persons fixing his/ its remuneration, this is covered in code of conduct under …………………..

  • Confidentiality
  • Remuneration and costs
  • Occupation, employability and restrictions
  • Independence and disclosure of interest
Check Answer

Correct Option: B

Q.11:- As an independent valuer, the valuer should not charge success fee - This is covered in code of conduct under………………..

  • Independence and disclosure of interest
  • Information management
  • Gifts and hospitality
  • Confidentiality
Check Answer

Correct Option: A

Q.12:- Valuation date is the date on which,

  • The date as on which the value of the asset is sought, in the valuation exercise.
  • The date on which the valuation is assigned.
  • Investigations relating to valuation assignment are undertaken.
  • The valuation report is issued.
Check Answer

Correct Option: A

Q.13:- While conducting a valuation assignment, the valuer comes to know that a conflict of interests arises due to him being associated to the company's major income generating entity. What should be the course of action for the valuer thereon?

  • The valuer shall excuse himself from the assignment, after explaining to the management the conflict of interest arisen.
  • The valuer shall carry on the valuation assignment as if the conflict of interest was never discovered.
  • The valuer shall disclose the conflict of interest and carry on the valuation assignment without letting it affect his independence.
  • None of the above.
Check Answer

Correct Option: A

Q.14:- Which of the following major components who create threat to a professional valuer's ability to comply with the Fundamental Principles?

  • Circumstance
  • Relationship
  • None of the above
  • Both (a) and (b)
Check Answer

Correct Option: D

Q.15:- The Terms of Engagement, oral or in writing, shall clearly specify the following:

  • Nature
  • Scope
  • Limitations of services to be performed and the responsibilities of the parties
  • All of the above
Check Answer

Correct Option: D

Q.16:- It is ethical for valuer to knowingly:

  • act in a manner that is fraudulent;
  • use, or fail to take steps to prevent another from using, a misleading Report;
  • act in a manner that is misleading;
  • None of the above
Check Answer

Correct Option: D

Q.17:- Where a potential conflict of interest may exist, a Valuer should make the …………………..in the report:

  • Disclosures
  • Comments
  • Note
  • Disclaimer,
Check Answer

Correct Option: A

Q.18:- The Valuer should note in the assumptions and limiting conditions the level of responsibilities. If any, being assumed by the Valuer for the work of:

  • Expert
  • The third party specialist
  • Professional
  • The valuer
Check Answer

Correct Option: B

Q.19:- At the option of the Valuer, the……………….of the third party specialist may be included in the Valuer's report:

  • Report
  • Written report
  • Views
  • Findings
Check Answer

Correct Option: B

Q.20:- A valuer, or his/its relative should not accept gifts or………………which undermines or affects his independence as a valuer:

  • Hospitality
  • Kind
  • Money
  • All of the above
Check Answer

Correct Option: A

Q.21:- A valuer shall endeavour to ensure that he/it provides true and adequate information and shall not misrepresent any …………………..

  • Facts or position
  • Facts or valuation
  • Facts or situations.
  • Facts or figures
Check Answer

Correct Option: C

Q.22:- A valuer should endeavor to ensure that he/it provides…..and adequate information and shall not misrepresent any facts or situations:

  • Correct
  • True
  • Fair
  • Honest
Check Answer

Correct Option: B

Q.23:- A Valuer shall refrain from accepting...................., if he is unlikely to be able to devote adequate time to each of his assignments.

  • Handful of assignments
  • Too many assignments
  • More than one assignment
  • More than three assignment
Check Answer

Correct Option: B

Q.24:- A valuer should render at all times high standards of service, exercise, due diligence, ensure proper care and exercise independent……………….judgment:

  • Personal
  • Correct
  • Self
  • Professional
Check Answer

Correct Option: D

Q.25:- A valuer should provide services for remuneration which is charged in a ……………. manner, is a reasonable reflection of the work necessarily and properly undertaken, and is not inconsistent with the applicable rules.

  • Transparent
  • Disclosed
  • Approved
  • Reasonable
Check Answer

Correct Option: A

Q.26:- A valuer should carry out professional services in accordance with the relevant…….professional standards that may be specified from time to time:

  • Regulation
  • Provision
  • Rule
  • Technical
Check Answer

Correct Option: D

Q.27:- A valuer shall maintain integrity by being ……………., straightforward, and forthright in all professional relationships.

  • Faithfull
  • Honest
  • Trustee
  • Fair
Check Answer

Correct Option: B

Q.28:- A valuer should wherever necessary disclose to the …………..possible sources of conflicts of duties and interests, while providing unbiased services:

  • Firm
  • Company
  • Clients
  • Organization
Check Answer

Correct Option: C

Q.29:- While using the work of an expert the valuer shall evaluate the……..qualification, experience, reputation and competence of the expert:

  • Skill
  • Professional connections
  • Knowledge
  • Reviews
Check Answer

Correct Option: A

Q.30:- The valuer takes…………………….from the management regarding information that the client’s management provides to the valuer for purposes of performing the valuation:

  • Letter
  • Affidavit
  • Representation
  • Undertaking
Check Answer

Correct Option: C

Q.31:- Which of the following point need to be considered to assess the credibility / reliability of such information, if the valuer relies on the information available in public domain?

  • The purpose of valuation
  • Materiality
  • The valuation conclusion of
  • All of the above
Check Answer

Correct Option: D

Q.32:- Which of the following is not included in non - financial information?

  • Strategy and 'future plans
  • Key customers and suppliers
  • Income tax returns for an appropriate number of years
  • Products or services, or both
Check Answer

Correct Option: C