Explanation:

According to the CFA Institute Standards of Professional Conduct, Standard IV(C) - Responsibilities of Supervisors requires that members with supervisory responsibility make reasonable efforts to detect and prevent violations of applicable laws, rules, regulations, and the Code and Standards.

Key points:

1. Option A is correct: Supervisors should incorporate professional conduct evaluation as part of employee performance reviews. This is a recommended procedure to ensure ongoing compliance monitoring and to reinforce ethical behavior as part of regular performance assessment.

2. Option B is incorrect: Supervisors cannot simply rely on an employee's statement about the extent of a violation, even with written assurance. Supervisors have an affirmative duty to investigate potential violations and take appropriate action. Written assurances do not absolve supervisors of their responsibilities.

3. Option C is incorrect: If a supervisor cannot discharge supervisory responsibilities because of an inadequate compliance system, they should take steps to improve the system, not just implement the Code and Standards. The supervisor has a responsibility to ensure adequate compliance procedures are in place and functioning properly.

Recommended procedures for supervisors include:

• Establishing written compliance procedures
• Providing education and training on compliance requirements
• Conducting regular reviews and monitoring
• Including ethical conduct in performance evaluations
• Taking prompt action when violations are detected

Therefore, incorporating professional conduct evaluation as part of an employee's performance review is a recommended procedure for compliance with supervisory responsibilities.