Business and Technology · Fundamental principles of ethical behaviour

Ethics, Professionalism and Professional Scepticism for ACCA BT

Updated 11 October 2026 · Fact-checked

Ethics are the moral standards that guide how accountants behave. Accountants must act in the public interest, not only for clients or employers. ACCA uses a principles-based approach, not a rules-based one. Professional scepticism means a questioning mind that does not accept information at face value. In the exam, match the scenario to the right term.

Understand Ethics, Professionalism and Professional Scepticism

Ethics are moral principles about right and wrong behaviour. Professionalism means acting with competence, honesty and respect for the standards of your profession. Accountants handle money, financial statements and confidential data. Other people rely on their work, so trust is the profession's main asset.

The public interest is the collective wellbeing of the community that relies on accountants. That includes investors, lenders, employees, governments and the wider public. An accountant's duty is not only to the client or employer who pays them. If the interests of a client and the public conflict, the public interest matters. This is why the profession is regulated and why ethical codes exist.

There are two ways to set ethical standards. A rules-based approach lists specific actions that are allowed or banned. It is clear and easy to check. But it cannot cover every situation, and people can follow the letter of a rule while breaking its purpose. A principles-based approach sets out broad principles and expects you to apply judgement to each situation. It is flexible and covers new situations. But it is less certain, and different people may reach different conclusions. The ACCA Code of Ethics and Conduct is principles-based.

Professional scepticism is an attitude that includes a questioning mind and alertness to conditions that may suggest misstatement or fraud. You also critically assess the evidence you are given. It does not mean assuming everyone is dishonest. It means you do not accept explanations or documents without checking them. It is most linked with auditors, but all accountants benefit from it.

Professional scepticism is related to professional judgement. Judgement is how you decide what to do after weighing the facts. Scepticism helps you gather and challenge those facts first.

Key formulas to remember

Rules-based approach: Specific rules → allowed or not allowed; Clear and easy to enforce, but cannot cover every situation and can be gamed by following the letter of a rule.
Principles-based approach: Broad principles + professional judgement → decision; Flexible and covers new situations, but less certain and open to different interpretations. ACCA's Code is principles-based.
Public interest: Duty extends beyond client or employer to society; Key reason the profession is regulated and why trust matters.
Professional scepticism: Questioning mind + critical assessment of evidence; Not assuming dishonesty; it means not accepting information without challenge.

How to solve Ethics, Professionalism and Professional Scepticism questions

Use this method for any question on ethics, professionalism, public interest or scepticism.

1Read the question and identify the term being tested: ethics, public interest, rules-based, principles-based or scepticism.
2Underline the key words in the scenario, such as 'specific list', 'judgement', 'questioned', 'accepted without checking' or 'wider society'.
3Match the words to the definition. A detailed list of banned actions points to rules-based. Judgement and broad principles point to principles-based.
4Check who is affected. If people beyond the client or employer are affected, think public interest.
5Check the number of answers required. For multiple response, select exactly the stated number.
6Eliminate options that overstate, such as 'always' or 'never', or that confuse scepticism with cynicism or distrust.
7Pick the answer that best fits the definition and review it once before moving on.

Quickest way: Keyword matching

When to use it: Use this when you have about a minute per two-mark question and the question tests definitions.

Spot the trigger word: 'specific rules' means rules-based.
'Judgement' or 'general principles' means principles-based.
'Wider community' or 'beyond the client' means public interest.
'Question' or 'challenge evidence' means professional scepticism.
Remove any option with extreme wording and choose from what is left.

Common mistakes in Ethics, Professionalism and Professional Scepticism

Saying the ACCA Code of Ethics is rules-based.
Students see a code and assume it is a list of rules.
Fix: Remember the Code sets principles and expects judgement. Rules-based means detailed lists of permitted and banned acts.
Thinking the accountant's only duty is to the client or employer.
The client pays the fee, so loyalty seems obvious.
Fix: Accountants also owe a duty to the public interest. Check who else relies on the work.
Treating professional scepticism as assuming people are lying.
The word sounds negative.
Fix: Scepticism means a questioning mind and critical assessment of evidence. It is not distrust or accusation.
Claiming a principles-based approach has no disadvantages.
Flexibility sounds like a pure benefit.
Fix: Remember its weakness: less certainty and differing interpretations. Rules-based gives clarity but is rigid.
Mixing up ethics with the law.
Both deal with right and wrong behaviour.
Fix: The law sets minimum enforceable standards. Ethics can demand more than the law requires.

Worked examples

Example 1

Which of the following best describes a principles-based approach to ethics?

A. A detailed list of every banned action with set penalties
B. Broad fundamental principles applied using professional judgement
C. Following the instructions of the client in all cases
D. Complying only with the minimum requirements of the law

Show the solution

The question asks for the best description of a principles-based approach.
Option A is a list of specific actions, which describes rules-based.
Option C ignores the public interest and is not an approach to ethics.
Option D describes legal compliance only, not a principles-based approach.
Option B matches: broad principles plus judgement.

Answer: B

Example 2

An accountant is reviewing a supplier's invoice that a manager says is genuine. The invoice has an unusual bank account and no purchase order. The accountant decides to confirm the details with the supplier before approving payment. Which concept does this show, and why?

Show the solution

The accountant did not accept the manager's statement at face value.
Unusual features were noticed: a different bank account and no purchase order.
The accountant took action to get further evidence before paying.
This is a questioning mind with critical assessment of evidence.
It is not distrust of the manager. It is a proper check.

Answer: Professional scepticism. The accountant questioned the evidence and sought confirmation instead of accepting the explanation, which is also protecting the organisation and the public interest.

Exam tips

Learn the one-line definitions of rules-based, principles-based, public interest and scepticism. Most questions test recognition.
In multiple response questions, select exactly the number asked. Do not add an extra option.
Watch for extreme words like 'always' and 'only'. They are usually wrong in ethics questions.
Link scenarios to the public interest when other people rely on the accountant's work.
Do not confuse scepticism with cynicism. Scepticism is questioning, not assuming wrongdoing.

Practice questions from Fundamental principles of ethical behaviour

Ethics, Professionalism and Professional Scepticism in other exams

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

Ethics, Professionalism and Professional Scepticism: frequently asked questions

What is the difference between rules-based and principles-based approaches?

A rules-based approach gives specific rules about what is allowed or banned. A principles-based approach gives broad principles and expects you to use judgement. ACCA's Code of Ethics and Conduct uses the principles-based approach.

Why are ethics important for accountants?

People rely on accountants for accurate information and honest advice. Without trust, financial reporting and business decisions would suffer. Ethical behaviour protects the profession's reputation and the public interest.

What is professional scepticism in ACCA BT?

It is a questioning mind and a critical assessment of the evidence you receive. You do not accept information without checking it. It does not mean you assume dishonesty.

What does the public interest mean for accountants?

It means the wellbeing of the wider community that relies on accountants, such as investors, lenders, employees and governments. Accountants must consider it, not just the wishes of a client or employer.