Audit and Assurance · Professional ethics and ACCA's Code of Ethics and Conduct

Fundamental Principles of the ACCA Code of Ethics Explained

Updated 11 October 2026 · Fact-checked

The ACCA Code of Ethics sets five fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. In an exam, identify the facts, name the principle at risk, explain why it is threatened, then state the action the accountant or auditor should take.

Understand Fundamental Principles of ACCA Code of Ethics

Auditors sell trust. Users of financial statements cannot check the numbers themselves, so they rely on the auditor being honest, fair and skilled. The Code of Ethics exists to protect that trust and the public interest.

The Code is built on five fundamental principles. They apply to every ACCA member, not just auditors. Each one covers a different way trust can fail.

Integrity: being straightforward and honest in all professional and business relationships. You do not knowingly give false or misleading information, or stay silent where silence would mislead.
Objectivity: not letting bias, conflict of interest or the influence of others override your professional judgement.
Professional competence and due care: keeping your knowledge and skills at the level needed, and acting diligently in line with technical and professional standards.
Confidentiality: keeping information you learn through work private. You do not disclose it without proper authority, unless there is a legal or professional right or duty to disclose. You also do not use it for personal advantage.
Professional behaviour: complying with relevant laws and regulations and avoiding conduct that would discredit the profession.

Students often mix up integrity and objectivity. Integrity is about your own honesty. Objectivity is about whether outside pressure or a relationship clouds your judgement. A person can be honest and still not be objective, for example an auditor who is a close friend of the finance director.

The Code takes a principles-based approach. It does not list every situation. You identify threats to the principles, judge how serious they are, and apply safeguards. If no safeguards can reduce the threat to an acceptable level, you decline or end the work. Threats and safeguards are covered in their own topics. Here you need to know the principles and be able to apply them to a scenario.

Key rules to remember

The five fundamental principles: Integrity + Objectivity + Professional competence and due care + Confidentiality + Professional behaviour; Learn all five by name. Exam answers must name the principle, not just say it is unethical.
Integrity: Integrity = straightforward and honest; Linked to not being associated with false or misleading information.
Objectivity: Objectivity = no bias, conflict of interest or undue influence; Most self-interest, familiarity and intimidation scenarios threaten this.
Professional competence and due care: Competence = knowledge and skill at the required level + diligence + keeping up to date; Includes not accepting work you cannot do properly and using proper supervision.
Confidentiality: No disclosure or personal use of information, except where there is a legal or professional right or duty; Disclosure may be allowed with client consent, or required by law, for example some reporting duties.
Professional behaviour: Professional behaviour = comply with laws and regulations + avoid discrediting the profession; Includes not making exaggerated claims about your services or qualifications.

How to solve Fundamental Principles of ACCA Code of Ethics questions

Use this method for any scenario asking which principle is breached or what the accountant should do.

1Read the scenario and underline the facts: who is involved, what was done, what pressure exists.
2Decide which principle is at risk. Ask: is it dishonesty (integrity), bias or pressure (objectivity), lack of skill or care (competence), disclosure or use of information (confidentiality), or breaking rules or harming reputation (professional behaviour)?
3Name the principle and explain in one sentence why the facts threaten it. Use the scenario's own details.
4State what the accountant or auditor should do: refuse, withdraw from the matter, apply a safeguard, consult a senior person or ACCA, or document the issue.
5If more than one principle is involved, deal with each separately and briefly.
6Finish with a clear conclusion, for example whether the work can continue.

Quickest way: Trigger-word matching

When to use it: Use in Section A and Section B objective questions where time is short.

Spot the trigger: lying or misleading means integrity.
Friendship, pressure, gifts or own interest mean objectivity.
Lack of skill, training or care mean competence and due care.
Sharing or using client information means confidentiality.
Breaking law or damaging the profession's image means professional behaviour.
Check the question wording: it may ask for the principle, the threat, or the action. Answer what is asked.

Common mistakes in Fundamental Principles of ACCA Code of Ethics

Treating integrity and objectivity as the same thing.
Both sound like general good behaviour.
Fix: Integrity is honesty. Objectivity is freedom from bias and influence. Ask whether the issue is lying or being swayed.
Saying confidentiality can never be broken.
Students remember the duty but not the exceptions.
Fix: State that disclosure is allowed with consent, or where law or professional rules give a right or duty to disclose.
Writing that something is just unethical without naming the principle.
Students rely on common sense instead of the Code.
Fix: Always name the principle and link it to the facts to earn the mark.
Describing competence as only holding a qualification.
Qualification feels like proof of skill.
Fix: Include due care, up-to-date knowledge, supervision and not accepting work beyond your ability.
Listing all five principles regardless of the facts.
Students hope to catch the right one.
Fix: Choose the principles that are actually threatened and explain each with scenario details.
Giving no action, only identifying the problem.
Students stop once they spot the issue.
Fix: End each point with what should be done, such as declining the work, using safeguards or escalating.

Worked examples

Example 1

An audit senior is told by the finance director to leave out a working paper note about a disputed receivable because it will upset the board. The senior has been friends with the finance director for many years. Identify the fundamental principles at risk and explain what the senior should do.

Show the solution

Facts: pressure from the client to omit a note, and a long friendship.
Objectivity is at risk. The friendship (familiarity) and the director's pressure (intimidation) could bias the senior's judgement.
Integrity is at risk. Leaving out the note would hide information and could mislead those reviewing the file or users of the financial statements.
Action: refuse to omit the note, keep the working paper complete, and report the pressure to the audit manager or engagement partner.
The manager should consider whether the friendship needs safeguards, such as replacing the senior on this client.

Answer: Objectivity and integrity are at risk. The senior should refuse, keep full documentation, and escalate the matter to the manager or partner.

Example 2

An audit junior at Zeta Co is asked to carry out tests on a complex financial instrument for which she has received no training. The manager says there is no time to arrange help and she should simply copy last year's file. Explain which principle is threatened and what should happen.

Show the solution

Facts: no training on the instrument, no supervision offered, and an instruction to copy the prior-year file.
Professional competence and due care is threatened. The junior lacks the knowledge needed, and copying last year's file without thought is not diligent.
The junior should tell the manager that she cannot perform the work properly without help.
Appropriate action: provide training or guidance, assign a more experienced team member, or arrange expert input.
If the work cannot be done competently, the firm should not rely on it and may need to adjust the audit plan.

Answer: Professional competence and due care is threatened. The firm should provide training, supervision or an expert rather than allow the junior to copy last year's file.

Exam tips

Name the principle every time. Marks are usually awarded for naming it and linking it to the facts.
Do not list all five principles. Pick those that fit the scenario and explain each in one or two sentences.
Always finish with an action: refuse, withdraw, apply safeguards, consult or escalate.
In objective questions, match trigger words to principles before you read the answer options.
For confidentiality, mention consent, legal duty or professional right to disclose, not an absolute ban.

Fundamental Principles of ACCA Code of Ethics 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 ACCA Code of Ethics: frequently asked questions

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

They are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. Every ACCA member must follow them. In exams you must name them accurately and apply them to a scenario.

What is the difference between integrity and objectivity?

Integrity means being honest and straightforward. Objectivity means not letting bias, conflicts of interest or pressure from others affect your judgement. An auditor who is honest but too close to the client can still lack objectivity.

Can an accountant ever disclose confidential information?

Yes, in limited cases. Disclosure is permitted with proper authority from the client, or where there is a legal or professional right or duty to disclose. Information must never be used for personal advantage.

Give an example of professional competence and due care in audit.

An auditor refuses to take on a specialised engagement without suitable skills, or properly supervises and reviews junior staff. Keeping technical knowledge up to date and following auditing standards are also examples.