Answer: incorporate a professional conduct evaluation as part of an employee's performance review.

**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.

Author: LeetQuiz .