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ACCA Applied Knowledge · Business and Technology

Fundamental Principles of Ethical Behaviour for ACCA BT

Fundamental principles of ethical behaviour are the five standards in the ACCA Code of Ethics: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. To solve questions, identify the principle at risk, name the threat, then choose a safeguard or action that removes or reduces it.

What this chapter covers

This chapter covers how accountants are expected to behave. It is built on the five fundamental principles in the ACCA Code of Ethics: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour. You then learn the five types of threat that can stop you complying, and the safeguards that reduce them. The chapter finishes with the wider ideas of ethics, professionalism and professional scepticism.

The content is mostly rule-based and scenario-based. You rarely calculate anything. Instead you read a short situation and decide which principle is under pressure, what type of threat it is, and what a sensible response looks like. That means you need precise definitions and a clear mental routine.

It links to the rest of BT through governance, the role of the accountant, and audit and control. Ideas such as independence, conflicts of interest and confidentiality come back when you study corporate governance, internal control, and professional accountants in business and practice. A solid grasp here makes those chapters easier.

Ethics questions appear in the objective test, and they reward students who know the terms exactly. The two-mark Section A questions often ask you to match a scenario to a principle or a threat, and the four-mark multi-task questions can build a short scenario around the same ideas. Because the content is compact and does not need calculations, it is one of the most efficient chapters to master. A few hours of focused work can turn it into reliable marks, and the same vocabulary helps you in governance and control topics.

Fundamental principles of ethical behaviour: topics in the order to study them

  1. 1Fundamental Principles of ACCA Code of EthicsStart here because every other topic refers back to the five principles, so you must know them and their meaning first.
  2. 2Threats to Compliance with Fundamental PrinciplesNext, learn the five threat types, because you can only judge a scenario once you know what a principle is and how it can be put at risk.
  3. 3Safeguards and Resolving Ethical ConflictsSafeguards only make sense after you know the threats, since each safeguard is chosen to reduce a specific risk.
  4. 4Ethics, Professionalism and Professional ScepticismFinish with the broader ideas, which tie the principles together and link to audit and governance later in the paper.

How to prepare Fundamental principles of ethical behaviour

Treat this chapter as a vocabulary and application exercise. Aim to recognise a scenario fast and label it correctly.

  1. Learn the five fundamental principles and write a one-line meaning for each in your own words.
  2. Learn the five threats: self-interest, self-review, advocacy, familiarity and intimidation. Attach a short everyday example to each.
  3. Practise the routine: read the scenario, find the principle at risk, name the threat, then pick the response.
  4. Learn the main types of safeguard, such as those created by the profession, by the employer or firm, and by law or regulation, and when a threat is too serious to safeguard.
  5. Study what to do when a conflict cannot be resolved, including consulting, documenting and, if needed, withdrawing.
  6. Do timed objective test questions on the whole chapter and review every wrong answer by naming the exact principle or threat you missed.
  7. Revise professional scepticism last, and link it to questioning information rather than accepting it at face value.

Common mistakes in Fundamental principles of ethical behaviour

  • Mixing up self-interest and self-review threats.

    Fix: Self-interest is about your own gain, such as a fee or a bonus. Self-review is about checking work you or your firm already produced.

  • Confusing objectivity with integrity.

    Fix: Integrity is being honest and straightforward. Objectivity is about unbiased judgement, free from conflicts of interest or undue influence.

  • Saying confidentiality can never be broken.

    Fix: Remember that disclosure is allowed or required where there is a legal or professional right or duty, or where proper authority exists.

  • Treating safeguards as always enough.

    Fix: If safeguards cannot reduce a threat to an acceptable level, the correct response may be to refuse the engagement or resign.

  • Choosing the answer that sounds the most ethical rather than the one that fits the scenario.

    Fix: Match the facts to a specific principle or threat first, then choose the option that addresses that exact risk.

  • Ignoring professional scepticism as a separate idea.

    Fix: Learn it as a questioning attitude and a critical assessment of evidence, and practise spotting when a scenario shows a lack of it.

Last-day revision: Fundamental principles of ethical behaviour

  • The five fundamental principles are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour.
  • Integrity means being straightforward and honest in professional and business relationships.
  • Objectivity means not letting bias, conflict of interest or the influence of others override your judgement.
  • Professional competence and due care means keeping your knowledge up to date and acting diligently.
  • Confidentiality means not disclosing information without proper authority, unless there is a legal or professional right or duty to disclose, and not using it for personal gain.
  • Professional behaviour means complying with relevant laws and avoiding conduct that discredits the profession.
  • The five threats are self-interest, self-review, advocacy, familiarity and intimidation.
  • Self-review: you evaluate your own earlier work. Advocacy: you promote a client's or employer's position too far.
  • Familiarity: a close relationship makes you too sympathetic. Intimidation: pressure stops you acting properly.
  • Safeguards reduce threats to an acceptable level. If they cannot, decline or end the work.
  • Professional scepticism is a questioning mind and a critical look at evidence.
  • In the exam, name the principle, then the threat, then the response.

Fundamental principles of ethical behaviour practice questions

Fundamental principles of ethical behaviour in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Fundamental principles of ethical behaviour: frequently asked questions

What are the five fundamental principles in the ACCA Code of Ethics?

They are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Learn a short meaning for each. Exam questions usually ask you to recognise which one a scenario involves.

What are the five threats to the fundamental principles?

They are self-interest, self-review, advocacy, familiarity and intimidation. Each describes a different way your judgement or behaviour could be compromised. Link each to a simple example to remember it.

Does this chapter involve calculations?

No. It is a scenario and definition chapter. Your marks come from identifying the right principle, threat or safeguard accurately and quickly.

How should I answer ethics questions in the computer-based exam?

Read the scenario once and decide which principle is at risk. Then name the threat and pick the option that removes or reduces it. For multiple response questions, select exactly the number of options the question asks for.