Explanation:
Correct Answer: A
According to Standard I(B) (Independence and Objectivity), members and candidates must exercise reasonable care and judgment to maintain independence and objectivity in their professional activities.
Procedure 1 (Limits on private placements): Firms should impose strict limits on investment personnel acquiring securities in private placements to prevent conflicts of interest.
Procedure 2 (Restrict special cost arrangements): Employees should pay for their own commercial transportation and hotel charges when attending meetings at an issuer's headquarters, avoiding reimbursements from corporate issuers to maintain objectivity.
Why not B or C?
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Which of the following combinations represents recommended procedures for compliance with the Standard on independence and objectivity?
A
Impose limits on investment personnel acquiring securities in private placements and prohibit employees from receiving reimbursement for air transportation from corporate issuers.
B
Impose limits on investment personnel acquiring securities in private placements and remove a company from the restricted list if the firm is unwilling to permit dissemination of adverse opinions.
C
Prohibit employees from receiving reimbursement for air transportation from corporate issuers and remove a company from the restricted list if the firm is unwilling to permit dissemination of adverse opinions.
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