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CFA Level I · CFA Level I Exam · Guidance for Standard V: Investment Analysis, Recommendations, and Actions

An analyst's research report on a retailer concentrates on the latest quarterly earnings release and omits discussion of the company's long-term debt. The report clearly states that its scope is limited to the quarterly results. The analyst's approach is most likely:

The approach is consistent with Standard V(B). Report writers who have done adequate investigation may emphasize some areas and omit others, such as focusing on a quarterly earnings release, as long as the report clearly states the limits of its scope so readers can follow and challenge it.

  1. Aconsistent with Standard V(B), because the report states the limits of its scopeCorrect
  2. Ba violation of Standard V(B), because every aspect of a company must be covered in a report
  3. Ca violation of Standard V(C), because limited-scope reports cannot be retained

Explanation

The guidance allows a report writer who has done adequate investigation to emphasize some areas and omit others, provided the limits of the report's scope are clearly stipulated. A report may dwell on a quarterly earnings release. Requiring full coverage of every aspect is incorrect, and retention is unrelated to scope.

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