Business and Technology · The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession

Role of Regulatory and Professional Bodies in Accountancy

Updated 11 October 2026 · Fact-checked

Professional bodies such as ACCA and IFAC set entry standards, ethics codes and training for their members, and discipline them. Regulators such as the FRC oversee the profession, often with legal powers. Together they protect the public interest by keeping accountants competent, ethical and accountable.

Understand Role of Regulatory and Professional Bodies

Accountants handle money, reports and confidential information that other people rely on. Investors, lenders, employees and governments cannot check every figure themselves. They need to trust the accountant. That trust is why the profession is organised and overseen.

A professional body is a membership organisation for accountants. ACCA is one example. It sets entry requirements and exams, requires continuing professional development (CPD), issues a code of ethics for its members and disciplines members who breach it. Membership is usually a choice, but it is needed to hold the qualification.

A regulator oversees the profession or the reports it produces, often with powers set by law. The UK Financial Reporting Council (FRC) is an example. It sets the UK Corporate Governance Code and standards for auditors, and it can investigate and sanction. A regulator may also supervise the professional bodies themselves.

At international level, IFAC (International Federation of Accountants) is the global organisation of professional accountancy bodies. It supports the profession worldwide and promotes high-quality standards. IESBA (International Ethics Standards Board for Accountants) is an independent standard-setting board supported by IFAC. It issues the International Code of Ethics for Professional Accountants, which national codes, including ACCA's, are built on.

The common aim is the public interest. This means the interests of everyone who relies on accountants, not only clients or employers. Bodies pursue it by setting standards, testing competence, requiring CPD, monitoring work and enforcing discipline. Self-regulation means the profession polices itself through its bodies. Its strength is expert knowledge. Its weakness is the risk of looking too lenient, which is why independent regulators exist.

Key formulas to remember

Professional body versus regulator: Professional body = membership organisation that sets and enforces member standards; Regulator = oversight body, often with statutory powers; This is the most common distinction to be tested.
IFAC versus IESBA: IFAC = global body of accountancy organisations; IESBA = independent board that issues the International Code of Ethics; IESBA writes the ethics code. IFAC supports it and the wider profession.
Main aim: Protect the public interest; The answer to why these bodies exist, not just serving members.
Typical functions: Entry standards + ethics code + CPD + monitoring + discipline; Use this list to build short answers.

How to solve Role of Regulatory and Professional Bodies questions

Use this method for any question on the role of accountancy bodies.

1Read the question and spot whether it asks about a professional body, a regulator, or an international body.
2Identify the key word: role, purpose, difference, or example.
3Recall the aim: the public interest, supported by trust and competence.
4Match the body to its function: ACCA sets member standards, IESBA writes the ethics code, IFAC supports the global profession, FRC regulates in the UK.
5Check the number of answers asked for in multiple response questions.
6Remove options that describe other bodies or functions, such as writing company law or setting tax rates.
7Choose the answer that fits the body's actual role and review it once.

Quickest way: Match body to function

When to use it: Use this for single-answer multiple choice questions that name a body and ask what it does.

Ask: does the body belong to members or does it oversee? Members means professional body. Oversight with legal powers means regulator.
If ethics code at international level appears, think IESBA.
If global profession or member bodies appear, think IFAC.
If protecting the public interest appears, it is usually the right reason.
Reject options about profit for members or the interests of one client.

Common mistakes in Role of Regulatory and Professional Bodies

Saying professional bodies exist mainly to protect their members' interests.
Membership organisations sound like they serve members.
Fix: State that the main aim is the public interest, even where members must follow rules that restrict them.
Treating professional bodies and regulators as the same thing.
Both set standards and can discipline.
Fix: Remember that a professional body is a membership body, while a regulator oversees with often statutory power.
Confusing IFAC and IESBA.
Both are international and similar in name.
Fix: IESBA issues the ethics code. IFAC is the global organisation of accountancy bodies that supports it.
Thinking an international code replaces national rules.
The word international suggests it overrides everything.
Fix: National bodies base their codes on the international one and may add stricter or local requirements.
Forgetting that self-regulation has weaknesses.
Students learn only the benefits.
Fix: Add that independent oversight is needed because a profession policing itself may appear lenient or biased.

Worked examples

Example 1

Which ONE of the following best describes the role of IESBA? (A) Issuing the International Code of Ethics for Professional Accountants (B) Regulating listed company audits in the UK (C) Setting international accounting standards for financial statements (D) Awarding the ACCA qualification

Show the solution

IESBA stands for International Ethics Standards Board for Accountants, so ethics is its focus.
Option B describes a national regulator such as the FRC, not IESBA.
Option C describes standard setting for financial reporting, which is a different board.
Option D is the role of ACCA, a professional body.
Option A matches IESBA's role.

Answer: A

Example 2

Explain the difference between a professional accountancy body and a regulator, and give one way each protects the public interest.

Show the solution

Define a professional body: a membership organisation, such as ACCA, which sets entry requirements and a code of ethics for its members.
Define a regulator: a body that oversees the profession or its reports, often with powers given by law, such as the FRC.
Professional body example: it requires CPD and disciplines members who breach the code, so members stay competent and ethical.
Regulator example: it can investigate and sanction auditors, which gives independent oversight beyond self-regulation.
Link both to the public interest: users of accounts can rely on accountants who are monitored.

Answer: A professional body is a membership organisation that sets and enforces standards for its members, for example through CPD and discipline. A regulator oversees the profession, often with legal powers, for example by investigating and sanctioning auditors. Both protect the public interest by keeping accountants competent and accountable.

Exam tips

Link every role back to the public interest. It is often the key to the correct option.
Learn one clear function for each body: ACCA, IFAC, IESBA and FRC.
In multiple response questions, select exactly the number asked and avoid options about member profit.
Watch for options that give the right function to the wrong body.
For written style answers in Section B, keep to two or three clear points, not a long list.

Practice questions from The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession

Role of Regulatory and Professional Bodies: frequently asked questions

What is the role of IFAC and IESBA in ethics?

IFAC is the global organisation of professional accountancy bodies and supports the profession worldwide. IESBA is an independent board, supported by IFAC, that issues the International Code of Ethics for Professional Accountants. National bodies base their own codes on it.

What is the difference between a regulatory body and a professional body?

A professional body is a membership organisation, such as ACCA, that sets standards, trains and disciplines its members. A regulator oversees the profession or its reporting, often with powers set by law, such as the FRC. Regulators may also oversee professional bodies.

How do professional bodies promote ethical standards?

They issue a code of ethics, test entry competence, require CPD, and investigate complaints. They can discipline members who breach the code, including removing membership. These actions protect the public interest.

What is self-regulation in accountancy?

It means the profession sets and enforces its own standards through its bodies. It uses expert knowledge, but can be seen as lenient. Independent regulators add oversight.