FOUNDATION 12 / Research integrity
Ethics, evidence & a research case
Write a defensible research note that separates facts, assumptions and conflicts.
By the end of this lesson
- Classify sources and disclose uncertainty.
- Recognize conflicts, confidentiality and misleading claims.
- Integrate calculations into an evidence-led case.
IBBC Capital Finance Foundations · Original content drafted with AI assistance. IBBC Capital is responsible for editorial review and content. General education, not an official CFA Institute curriculum or credential.
Facts, assumptions and judgments
A research note should distinguish a sourced fact, a modeling assumption and an analyst’s judgment. Record source, publication date, period covered and verification status. Repeating a sponsor’s statement does not make it independently verified.
Use direct evidence for material claims and preserve provenance. When information is missing or inconsistent, identify the gap and its effect on the conclusion. “Unknown” is more honest than filling a gap with a favorable invented number.
Conflicts and independent judgment
Ownership, compensation, referral fees or a relationship with a subject can affect incentives. Disclosure helps a reader evaluate a conflict, but disclosure alone does not make a biased process acceptable. Safeguards or declining an assignment may be needed.
Keep research conclusions independent from commercial pressure. Do not describe unverified investors, mandates, partnerships or performance as established facts. A polished chart cannot substitute for evidence.
Confidentiality and responsible tools
Do not upload confidential or personal information into an unapproved tool. Obtain appropriate authorization and use approved handling controls. If you suspect nonpublic sensitive information, stop dissemination and escalate through the appropriate review process instead of trying to trade on it.
AI-generated analysis needs source checks, arithmetic checks and human review. Do not invent citations or present a generated estimate as an observed fact. These are general research principles, not a reproduction of an official CFA code or country-specific legal advice.
A compact research-note structure
Use six headings: question; evidence; assumptions; calculation; risks and missing evidence; conditional conclusion. Put a date and version on the note. Explain how a material assumption changing would alter the result.
A self-study case can test calculations without claiming a real mandate or giving a recommendation. The final checkpoint in this course measures answers to original learning questions; it does not verify professional competence or award a credential.
Case: a hypothetical project summary
- A sponsor reports an initial cost of 900 and a cash inflow of 1,100 after one year. Neither number is independently verified.
- At an assumed 10% discount rate, modeled NPV = −900+1,100/1.10 = 100.
- If the inflow is only 900, NPV = −81.82. This sensitivity changes the conclusion.
- Write: “Positive NPV under stated assumptions; revenue evidence and omitted costs require verification.” Do not write: “Verified profitable project.”
Try before looking at the explanation
Change one input in the practice tool below. Predict the direction first, calculate second, then explain why it changed.
Work the numbers
Common mistakes to catch
- Treating self-reported figures as independently verified.
- Hiding a material conflict in vague wording.
- Publishing a confident conclusion without showing missing evidence.
Knowledge check · 6 original questions
Answer all six. At least five correct marks the lesson complete for self-study. You can retry; this is not a credential.
Keep these ideas
- State what you know, what you assume and what you still need to check.
- A defensible conclusion has boundaries, not just a persuasive headline.