Bob Carter, president of Boswell, invites Abbott and several other analysts to visit his company and offers to pay her transportation and lodging. Abbott declines Carter’s offer but, while visiting the company, accepts a gift from Carter valued at $75. Abbott fails to disclose the gift to her supervisor at Capital when she returns.
Is this a violation of Standard 1(B)? If no, then what is the criteria to judge the value of the gift accepted by the employees from their clients?
Years ago there was a threshold of $100, but that’s long since been abandoned. The question is whether the value of the gift is sufficient to affect the analyst’s independence and objectivity.
I’d say that $75 isn’t, but there isn’t a set value that separates “OK” from “not OK”.
More importantly, on the real exam they won’t give you a situation where the gift will be close to the threshold and you have to determine on which side it falls; that’s not the point of the exam. The point of the exam is to establish whether you know what to do when it clearly falls on one side, or clearly falls on the other side. Expect on the exam to see a gift that is either a baseball cap, or a week’s vacation (all expenses paid) in Aspen.
yes, the CFAI texts have excluded the $100 limit, on their recent examples and exam questions, they will make it very obvious that the gift has little to no value by explicitly mentioning “small token” or company souvenirs, etc.
Company Company souvenirs nned not be disclosed, right? @ S2000magician: Thank you. I thought 100 was the threshold, I read it in cfai texts…“best practice would be to” - as in they they don’t say that 100 is a threshold, but they’ve mentioned the number-100