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CFA Level I · CFA Level I Exam · Guidance for Standard IV: Duties to Employers

Priya Nair is a CFA charterholder who provides portfolio research to an asset manager under a written agreement as an independent contractor, not an employee. A question arises about the extent of her duties to the manager. Which statement is most accurate under Standard IV(A)?

Nair's duties are governed by the agreement she has with the client, and she must abide by its terms. Standard IV(A) applies in an employment context, so she must first determine whether she is an employee or independent contractor, and she should clearly define the scope of her responsibilities.

  1. AHer duties are governed by the terms of the oral or written agreement with the client, which she must abide by.Correct
  2. BStandard IV(A) applies to her in the same way as to an employee regardless of the agreement.
  3. CBecause she is a contractor, she owes no duties of loyalty to anyone.

Explanation

The guidance on nature of employment says an independent contractor's duties are governed by the oral or written agreement with the client, and the member must abide by its terms. Members must determine whether they are employees or contractors to decide if Standard IV(A) applies. She should define her scope clearly; contractor status does not remove all duties.

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