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APC - Quant Surveying 2021-22 > Ethics > Flashcards

Ethics Flashcards

1
Q

When was the Surveyors Club formed?

A

1792

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2
Q

Who founded the Institution of Chartered Surveyors and in what year?

A

John Clutton was the 1st President and it was founded in 1868

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3
Q

When did the institution receive Royal Charter status?

A

Royal Charter status was received in 1881 by Queen Victoria

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4
Q

What is the role of the RICS?

A

R M P P
1) Regulate and promote the profession
2) Maintain educational and professional standards
3) Protect clients and customers through strict codes and professional standards
4) Provide impartial advice, analysis and guidance

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5
Q

What is the RICS motto?

A

Est Modus in Rebus - There is measure in all things

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6
Q

Where is the RICS headquarters?

A

12 Great George Street, Parliament Square, London

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7
Q

What is the structure of the RICS?

A

Strategic direction set out by our Governing Council
1) Governing Council - 55 currently on council - Set the strategies and policies and chaired by the president
2) Regulatory Board - decide regulatory policy and oversee implementation
3) Management Board - Implement strategy set out by governing council
4) Audit Committee - matters relating to audit arrangements and internal control - reports to GC
5) Financial Committee

Self Regulated through 5 Principles of Better Regulation

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8
Q

Who is the current RICS president?

A

Clement Lau - September 2021

Ann Gray next president

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9
Q

Who is the RICS President Elect?

A

Ann Gray

Tina Paillet Next VP

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10
Q

What are the Obligations for RICS Firms under the new Rules of Conduct Feb 2022 update?

A

Firms must.
C I D C I D R

1) Have a Complaint Handling Procedure in place
2) Have PII
3) Arrangements to cover death of insolvency
4) Cooperate with RICS
5) Provide Information to RICS
6) Display RICS Designations
7) Report to RICS

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11
Q

What are the 5 principles of better regulation?

A

P A C T T
1) Proportionality
2) Accountability
3) Consistency
4) Transparency
5) Targeting

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12
Q

What are the Obligations for RICS members under the new Rules of Conduct Feb 2022 update?

A

RICS member obligations
C I C

Comply with CPD requirements
Provide Information to RICS when requested
Cooperate with RICS

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13
Q

What are the rules of conduct for firms and members as updated in February 2022?

A

Members and Firms must

Rule 1 - be honest, act with integrity and comply with their professional obligations, including obligations to the RICS.

Rule 2 - maintain their professional competence and ensure that services are provided by competent individuals who have necessary expertise.

Rule 3 - provide good quality and diligent service

Rule 4 - treat others with respect and encourage diversity and inclusion

Rule 5 - Act in the public interest, take responsibility for their actions

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14
Q

What is a breach of conduct?

A

Either;
1) Bringing profession into disrepute
2) Breaking a law / agreement / code of conduct

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15
Q

What does a breach of conduct trigger?

A

A complaint to the RICS by a 3rd party or client

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16
Q

Who enforces a breach of conduct?

A

The RICS Charter and Byelaws allow the Regulatory board to make Disciplinary, Registration and Appeal Panel Rules

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17
Q

What is the Regulatory Board?

A

1) Its a board which sits under the RICS Governing Council.
2) They administer regulatory matters on policies.
3) It is chaired by a non-member to demonstrate regulation is independent from members interests.

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18
Q

What is the RICS Disciplinary Procedure for a breach of conduct?

A

1) Regulatory board reviews the case
2) fixed penalty may be issued OR may be informed they are liable for disciplinary proceedings
Fixed Penalty
APPLIES TO - minor breaches - e.g. failure to pay RICS Fee
DISCIPLINE - restrain member from taking certain actions ORFine

Disciplinary Proceedings
1) Consent Order
- Minor breach - fine of £2000
2) Disciplinary Panel
- Serious Breach - unlimited fine / Expulsion

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19
Q

Process for disciplinary panel under a breach of conduct?

A

Disciplinary panel needed if its a serious breach
OR Gross persistent / failure to comply with rules

Discipline
1) Caution
2) Unlimited fines
3) Conditions of membership / expulsion

The panel is a public hearing
Hearing is posted on RICS website 14 days before

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20
Q

What happens if you are found not liable for a breach of conduct after disciplinary panel?

A

The RICS Member can apply to RICS to recover their costs

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21
Q

What is the RICS?

A

It is the foremost organisation for professionals working in the built environment, land and property sectors in the UK and abroad

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22
Q

Where does the RICS operate?

A

Worldwide - in over 140 countries and includes over 100,000 accredited members

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23
Q

What is the Royal Charter?

A

A decree that requires RICS to “Promote the usefulness of the profession for the public advantage in the UK and abroad”

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24
Q

How is the RICS Regulated?

A

It is self regulated
not regulated by government but internally monitored
RICS adheres to the 5 principles of better regulation

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25
Q

How is the RICS governed?

A

By a governing council of 55 currently
The GC meets 3 x a year to set strategic policy, chaired by the president

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26
Q

How many RICS professional groups are there?
Name a few

A

22
Quantity Surveying & Construction
Project Management
Valuation
Residential
Building Surveying
Infrastructure

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27
Q

You have named the Rules of Conduct for members.
Do we have to follow them?

A

It is good practice to follow these as you may open yourself up to a breach of conduct if not.
It is however not mandatory - only good practice

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28
Q

Why do we have rules of conduct for members and firms?

A

To ensure consistent, high standard of professionalism anywhere in the world. Clients know what to expect from RICS members.

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29
Q

What is meant by CPD?

A

Continued Professional Development

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30
Q

What are the CPD requirements?

A

1) Minimum of 20 hours per year.
2) Must have 10 hours formal - rest can be informal
3) Professional and ethical CPD must be undertaken on rolling 3 year programme
4) All CPD must be recorded online

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31
Q

What is formal CPD?

A

Any form of structured learning that has clear learning objectives and outcomes - professional course / online training

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32
Q

What are the CPD requirements for the APC?

A

96 hours within 2 years before sitting
48 hours of which has to be formal

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33
Q

Give some examples of formal CPD?

A

Professional Courses / Seminars
Formal teaching
Online events and video sessions
Webinars

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34
Q

What is informal CPD?

A

Self managed learning that is relevant or related to your professional role

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35
Q

Give some examples of informal CPD?

A

Private study
reading associated with professional role
mentoring - support to trainees
Delivering presentations

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36
Q

How would you meet the requirements for professional and ethical CPD?

A

1) Undertake free online RICS ethics module
2) familiarising yourself with New global professional and ethical standards

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37
Q

How do you record your CPD?

A

Using the RICS online CPD management recording system

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38
Q

where is G&T’s complaints handling procedure found?

A

Can be found on our intranet and is provided when requested.

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39
Q

What is RICS position on complaints?

A

1) Firms shall operate a complaints handling procedure (CHP) and maintain a complaints log
2) CHP must include an Alternative Dispute Resolution Mechanism approved by Regulatory Board

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40
Q

What is RICS position on a complaints handling procedure?

A

IT MUST:
be fit for purpose
be made available and understood by all staff
be shared with complainants
be regularly reviewed and updated
be agreed with PII brokers to not compromise cover
Provide details of independent redress if not resolved

Clients should be made aware of CHP in appointment

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41
Q

What should you do if you receive a complaint from a client?

A

Inform your line manager / supervisor

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42
Q

What should you do if you receive a complaint from a client?

A

1) Inform your line manager / supervisor
2) They should then inform the firms designated complaints handler
3) The DCH has 7 days from receiving complaint to write to acknowledge complaint and outline process and timescales for complainant
4) The complaint must be resolved within 28 days of acknowledgment of the complaint
5) G&T must write to inform complainant of outcome
6) If complaint not resolved - complainant referred to independent ombudsman provided by the RICS

PI insurer must be notified as soon as complaint had formally been made so they can update their premium if necessary

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43
Q

What is the RICS independent redress scheme?

A

Its independent adjudication for disputes between customers and companies regarding the surveying activities of subscribing RICS member firms

CEDR is the RICS approved ADR provider

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44
Q

What is the CEDR?

A

The Centre for Effective Dispute Resolution
It is the RICS approved ADR Provider

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45
Q

What is the need for a Complaints Handling log?

A

1) Enables complaints to be recorded
2) Enables complaints to be better managed
3) Identifies areas for improvement

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46
Q

When would we have to handle clients money?

A

1) To hold our fees in advance
2) Holding future payments to the contractor

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47
Q

What must be in place for us to hold Clients money?

A

Client Money Protection Scheme

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48
Q

What is the Client Money Protection Scheme?

A

Free service to the Clients of the RICS regulated firms to be reimbursed by direct loss of funds

49
Q

What is the maximum that can be claimed per claim within the Client Money Protection Scheme?

A

£50,000 per claim
maximum aggregate is £5.3m per year
Claims must be made within 6 months

50
Q

What systems and controls should a firm have in place for handling client money?

A

A firm should ensure that:
1) they hold client money in client bank accounts separate from all other monies
2) bank should be titled to include the name of the firm and ‘client’.
3) have written confirmation from the bank of client account conditions
4) have advised clients in writing of the bank account details, including arrangements for interest
5) Obtain consent from client in writing if firm is to retain interest

51
Q

What happens if there are surplus client funds in an account?

A

1) Ensure all efforts are made to trace the client or owner of the money
2) hold all surplus money in a client suspense account
3) hold surplus money for at least 6 years
4) After 6 years the money may be donated to a registered charity
5) a receipt for this transaction should be obtained

52
Q

What is a conflict of interest?

A

A conflict of interest is anything that impedes or might be perceived to impede an individuals or firms ability to act impartially and in the best interest of a client

53
Q

Why should we be concerned over a conflict of interest?

A

Can cast doubt over your integrity. It can have a damaging effect on your firm and the profession

54
Q

Give me an example of when a conflict of interest might occur?

A

1) acting for another person with competing interests at the same time; advising both a seller and a buyer of the same property

55
Q

What is the general advice for firms on handling clients money?

A

1) All RICS regulated firms must protect the security of Client’s money on their behalf with robust controls and systems in place
2) All regulated firms who hold Client’s money must pay a regulatory fee on an annual basis to cover operational costs of the Regulatory Review Visit audit by RICS accountants

56
Q

What practices need to be followed before account set up with Client’s money?

A

1) Client must agree to the account handling in writing with signatories from both parties
2) There must be an agreed drawdown schedule

57
Q

Why is cash money avoided?

A

1) There is no auditable trail
2) We do not know where it has come from - possible money laundering

58
Q

What practices need to be followed during account usage with Client’s money?

A

D R I D I C 3

DBA
Recon
I to C
DD
I/D
CMO
3 DAYS

1) A Designated bank account must be set up named ‘Client’ and name of the firm
- could be private account - signatory from G&T
- escrow account with 3rd party - comes with fees
- client must be advised of all details of bank account
2) Only clients money should be deposited
3) must be deposited within 3 days if sent to us first
4) interest to be paid to Client unless stated otherwise
5) Bank reconciliation undertaken at regular intervals
6) money should be distributed via direct debit
7) Procedures in place for insolvency or death

59
Q

What practices need to be followed after account usage with Client’s money?

A

R E D R

Record 6/ 12 years
Effort to Return
Donate after 6 years
Hold Receipt

1) Record kept for 6/12 years from last statement
2) remaining money - all efforts to return to client
3) after 6 years - money can be donated to reg charity
4) Hold receipt of where funds have been sent

60
Q

What is Professional Indemnity Insurance?

A

Third party insurance to protect professional advice and service by preventing the insured from bearing full cost of defending against a claim for negligence

61
Q

What does Limited Liability mean?

A

how much a company can get sued for
indicates the amount of PII a company should take out

62
Q

What does Professional indemnity mean do for a party?

A

Its puts a party back in the position they would have been if no loss had occurred
it provides financial protection in event a Client suffers financial loss as a result of negligence

63
Q

Who has to take out PII?

A

All registered firms need to have adequate and appropriate PII in place that complies with requirements of RICS Rules of conduct for firms

64
Q

What levels of PII can be taken out?

A

Based on firms turnover
£100k or less = £250k min limit of indemnity
£100k - £200k = £500k
£200k and above = £1m

65
Q

What is G&T minimum level of PII?

A

Due to our turnover our min level of indemnity is £1m
But various levels are held based on project value

66
Q

What PII should be taken out if your a new company with no previous turnover?

A

min requirement should be expected turnover for 1st year

67
Q

What is the excess in terms of PII?

A

The uninsured amount of the claim
The excess is to try and deter fraudulent claims

68
Q

What are the maximum levels of uninsured excess that an RICS regulated firm can carry?

A

Firm turnover £10m or over —> no limit set

Firm turnover £10m or less ——> greater of 2.5% or £10k

69
Q

What does “ Each and Every Claim’ basis mean?

A

The limit of indemnity is payable in respect of each claim made in 1 year

70
Q

What does “Claim Made” basis mean?

A

When claim is received, its the insurer in place at that time that will respond rather than insurer in place when negligent act occurred
- policies must cover past and present employees
- claim is made against G&T - not the individual

71
Q

What’s the difference between guidance notes and practice statements?

A

Guidance notes are considered best practice
practice statements are mandatory documents that you must follow

72
Q

Is there any type of CPD that has to be done on 3 yearly basis?

A

RICS Ethics Module

73
Q

What needs to be avoided when handling clients money?

A

Money needs to be tracked at all times
should not be kept with any other money
kept in a secure bank account for clients money only

74
Q

How should money be received from a client when handling their money?

A

Client’s can send money by cheque or transfer it to company account
Money should be deposited within 3 days

75
Q

Can you tell me how you handle clients money?

A

Clients money should only be handled by trained and competent staff
Strict accounting systems in place
Money should be deposited within 3 days

76
Q

If you were to set up a new company what would you need in place?

A

Firms details form
PI Insurance
Policies in place for holding clients money
Complaints handling procedure
Appropriate processes for training
Payment of any fees needed

77
Q

What information do RICS firms have to submit to the RICS?

A

Details of PII
Nature of clientele
types of business staffing
complaints log and handling
info on clients money

78
Q

Can you accept cash for fees?

A

G&T Policy - cannot accept cash for fees
Under money laundering regs cans accept up to £10k

79
Q

Are you aware of the process for disciplinary procedures under RICS?

A

1) Receipt of info or allegation
2) Decision to begin an investigation
3) Decision as to if its a realistic prospect
4) Disciplinary Proceedings

80
Q

What do you need in place to set up a new RICS regulated company?

A

1) PI insurance
2) Complaints Handling Policy
3) Policy on Holding clients money
4) Other insurance such as public liability, building insurance

81
Q

Why does the RICS have rules of conduct?

A

Consistency of service and approach
maintaining professional standards, governance and regulation
Clients know what to expect from a MRICS

82
Q

What are they types of RICS Professional standards?

A

1) Professional Standards
- mandatory requirements
2) Guidance Notes
- non mandatory but best practice to follow
3) APC
- requirements and guidance for entry into profession
4) Data standards
- ensure software and tech can adopt RICS standards

83
Q

What is the RICS Black Book?

A

suite of guidance notes that define good technical standards for quantity surveyors and construction professionals

84
Q

What is the status of the professional statement?

A

document provides members with mandatory requirements or a rule that a member / firm expected to adhere to.

85
Q

What sanctions may RICS take if you fail to apply professional statement?

A

Written warning
possible expulsion

86
Q

What should employers do to create an ethical environment?

A

Establish confidential procedures for whistle blowing independent of normal chain of command
include ethical evaluations into formal performance appraisal
promote CPD
become chartered with RICS

87
Q

What is the difference between ethics and integrity?

A

ethics are more principles that govern persons behaviour or the conducting of an activity
integrity is quality of being honest and having strong moral principles

88
Q

Key areas where ethics are important?

A

Conflicts of interest
whistle blowing
gifts / bribes / hospitality
money laundering / inside dealing

89
Q

How do you keep up to date with topical issues?

A

RICS website
Discussions with colleagues
construction related news - building mag

90
Q

Can you accept a gift from a client?

A

I would not accept gifts, hospitality or services which might suggest an improper obligation
Gifts can be accepted in some circumstances - consult the ethics tree and make informed decision

91
Q

What things would you consider when assessing if a gift is appropriate?

A

value
timing of gift
if proportionate to working relationship
will gift affect my ability to be impartial
is it proportionate to gifts being given to others

92
Q

What is a conflict of interest?

A

anything that impedes an individuals or firms ability to act impartially and in the best interest of the a client

93
Q

Has the RICS published any information on conflicts of interest?

A

Conflicts of interest professional statement - March 2017

94
Q

Give an example of a conflict of interest?

A

Acting for both developer and contractor
acting for two competing developers / contractors

95
Q

What is informed consent?

A

Where RICS member has highlighted to all parties who are or may be affected that there is a conflict of interest. BUT where those parties give consent to continue with their role

96
Q

What action should be taken if a conflict of interest arises?

A

As soon as you are aware - disclose to client in writing the possibility and nature of conflict
advise client in writing you cannot continue to represent

UNLESS

parties feel they can act 100% impartially
client finds it acceptable and approves in writing - INFORMED CONSENT

97
Q

What is a bribe?

A

An inducement or reward offered, promised or provided to gain any commercial, contractual, regulatory or personal advantage

98
Q

What is the Bribery Act 2010?

A

Bribery Act 2010 cover criminal law relating to bribery
Act contains 4 main bribery offences
1) General Offence of bribing
2) General Offence of being bribed
3) Offence of bribing a foreign public official
4) Corporate offence to prevent bribery

99
Q

What are the 6 principles of the Bribery Act?

A

1) Proportionality - action taken should be proportionate to risk and size of the organisation

2) Top Level Commitment - Senior people best placed to ensure they conduct business without bribery

3) Risk Assessment - Will help show nature or extent of exposure to bribery

4) Due Diligence - having a risk based approach to business relationships

5) Communication - employers need to communicate policies and procedures to staff - training etc.

6) Monitoring and Reviewing - risks to organisation may change overtime - carry out regular reviews

100
Q

Who does the Bribery Act 2010 apply to?

A

Applies to all people in both private and public sector

101
Q

What is your position for compliance with the Bribery Act 2010?

A

My company has an anti bribery and corruption policy which applies to me as an employee. I follow the procedures in the policy
I would report any act of bribery to the Serious Fraud Office or National Crime Agency

102
Q

What are the potential consequences for not adhering to the Bribery act 2010?

A

Max penalty of 10 years imprisonment and / or unlimited fine for individuals
Corporates face an unlimited fine

103
Q

What is money laundering?

A

Illegal process of making large amounts of money generated by criminal activity appear to have come from a legitimate source.

104
Q

What do you do if you suspect money laundering?

A

Raise with my line manager
Submit suspicious activity report to national crime agency

105
Q

What regulations are associated with money laundering?

A

The money laundering and terrorist financing regulations 2019

106
Q

A client asks you to take responsibility for making interim payments to the contractor. The client wants to give you £500k in cash to make the payments. What do you do?

A

I would not accept the cash. I would encourage the client to pay cash into a bank account. The bank then takes responsibility to check legitimacy of cash.

If i had serious concerns i would report to the National Crime Agency

107
Q

What is corruption?

A

Corruption is a form of dishonesty or criminal offense undertaken by a person or organisation entrusted with position of authority

108
Q

What is a price fixing cartel?

A

group of formally independent producers whose goal is to increase their collective profit by pushing price of a product up as high as possible

109
Q

What is terrorist financing?

A

solicitation, collection or provision of funds with intention to support terrorist acts or organisations

110
Q

What is facilitation payment?

A

payment made to a public or govt. official that acts as incentive for official to complete some action to the benefit of the paying party

111
Q

What is modern slavery?

A

the severe exploitation of other people for personal or commercial gain
being forced to work against will or illegally

112
Q

what is the relevant legislation for modern slavery?

A

Modern Slavery Act 2015

113
Q

Examples of modern slavery?

A

1) Forced labour
2) human trafficking
3) Child Slavery

114
Q

How would you report modern slavery?

A

Report to the Home Office or call modern slavery helpline

115
Q

What does RICS say about PII for firms?

A

All firms MUST be covered by PII

116
Q

Why is PII needed?

A

If a firm faces a claim, it is protected from financial loss that it cannot meet from its own resources

Ensures the firms clients do not suffer financial loss which the firm cannot meet

117
Q

Any one claim vs Aggregate claim? Whats the difference

A

Any one - provides cover up to the full limit for each individual claim made in period

Aggregate - provides cover up to the full limit for all claims made in period

118
Q

What measures can be taken to avoid PII claims?

A

1) Keep records of meetings / conversations
2) record recommendations / advice
3) Follow RICS guidance and professional statements
4) Follow RICS rules of conduct
5) Follow company procedures and policy

119
Q

What is PII run off cover?

A

run off is a form of PII which covers historical liabilities of a business after it ceases to trade.

Any claims made under policy will relate to work carried out before trading ceased, so covers legacy issues

APC - Quant Surveying 2021-22 (18 decks)

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