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Strategic Business Reporting (International) · Professional and ethical behaviour in corporate reporting

Fundamental Ethical Principles in the ACCA Code

Updated 11 October 2026 · Fact-checked

The ACCA Code of Ethics and Conduct rests on five fundamental principles: integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. In SBR you name the principle at risk, link it to facts in the scenario, explain why it is breached, and recommend action.

Understand Fundamental Ethical Principles in the ACCA Code

Every ACCA member, whatever their role, must follow five fundamental principles. They apply to accountants in practice, in business and in employment. They are the base for all other ethics rules, including threats and safeguards.

The five principles are:
- Integrity: be straightforward and honest in all professional and business relationships. Do not be associated with information you believe is false or misleading, or that omits something needed.
- Objectivity: do not let bias, conflict of interest or the influence of others override your professional judgement.
- Professional competence and due care: keep your knowledge and skill at the level needed to give competent service, and act diligently in line with technical and professional standards.
- Confidentiality: respect the confidentiality of information gained through professional work. Do not disclose it without proper authority, unless there is a legal or professional right or duty to disclose. Do not use it for personal advantage or for third parties.
- Professional behaviour: comply with relevant laws and regulations, and avoid conduct that you know, or should know, might discredit the profession.

The difference between integrity and objectivity is a common search. Integrity is about honesty: is the information true and complete? Objectivity is about independence of judgement: is your view being bent by pressure or self-interest? A finance director who knowingly overstates revenue breaches integrity. An accountant who accepts a doubtful accounting treatment because the CEO controls their bonus has an objectivity problem.

One event can breach several principles. Manipulating earnings to hit a bonus target can breach integrity, objectivity and professional behaviour. Good answers say which is the main breach and mention the others briefly.

In SBR, ethics sits in the 20-mark reporting and ethics question in Section A, with two professional skills marks in that question's marking. You must apply the principles to the reporting issue in the scenario, not just list them.

Key rules to remember

Integrity
Integrity = honest, straightforward, not associated with false or misleading information
Look for deliberate misstatement, omission or concealment.
Objectivity
Objectivity = judgement free from bias, conflict of interest or undue influence
Look for pressure from management, bonuses, family or business ties.
Professional competence and due care
Competence and due care = adequate knowledge and skill + diligent, standards-based work
Look for work outside your expertise, or rushed, careless work.
Confidentiality
Confidentiality = no disclosure or personal use of information unless there is authority, or a legal or professional right or duty
Look for leaks, insider use and requests for client information.
Professional behaviour
Professional behaviour = comply with laws and regulations + avoid conduct that discredits the profession
Look for illegal acts, misleading marketing or disreputable conduct.

How to solve Fundamental Ethical Principles in the ACCA Code questions

Use the same sequence for any ethics requirement. It keeps your answer applied and gives you professional skills marks.

  1. 1Read the requirement. Note whether it asks you to identify issues, discuss ethical implications, or recommend action.
  2. 2Pick out the facts that look wrong: pressure, targets, bonuses, relationships, errors, secrecy, lack of skill.
  3. 3Match each fact to a fundamental principle. Say which principle is at risk and why.
  4. 4Explain the breach or threat using the scenario's figures and people, not general statements.
  5. 5Link to the reporting issue, such as the accounting treatment that would mislead users if the principle is breached.
  6. 6Recommend actions: raise with those charged with governance, seek advice, document, consider resignation or disclosure as a last step.
  7. 7Conclude with a clear view and a balanced, professional tone.

Quickest way: Fact, principle, why, action

When to use it: Use when you have about 8 to 10 minutes for an ethics requirement and must score fast.

  1. Underline each suspicious fact in the scenario.
  2. Write one line per fact in the form: fact, principle, why it is a breach or risk.
  3. Add one concrete action for the main issue.
  4. Add one line on what the user of the accounts would be misled about.
  5. Stop when each fact has been covered. Do not add extra theory.

Common mistakes in Fundamental Ethical Principles in the ACCA Code

  • Listing the five principles with definitions and no application.

    Students learn the Code by heart and treat the question as recall.

    Fix: Spend most of the answer on scenario facts. Define a principle in one short phrase only.

  • Confusing integrity with objectivity.

    Both feel like 'being honest'.

    Fix: Ask: is the information false (integrity) or is judgement biased by pressure or interest (objectivity)?

  • Treating confidentiality as absolute.

    The word suggests nothing may ever be disclosed.

    Fix: State that disclosure is allowed or required where law or professional duty permits it, or where there is proper authority.

  • Naming only one principle when several are breached.

    Students stop after the first obvious link.

    Fix: Identify the main principle first, then mention others that also apply, such as professional behaviour.

  • Giving no recommendation.

    Students think identifying the issue is enough.

    Fix: Always end with practical steps, such as escalating to the audit committee, seeking advice and documenting.

  • Ignoring the accounting link.

    Ethics is treated as separate from reporting.

    Fix: Say how the unethical conduct would misstate the financial statements and mislead users.

Worked examples

Example 1

The finance director of Zeta Ltd asks you, the financial controller, to delay recognising a ₹40,00,000 impairment loss until after the year end so that the profit-linked bonus is paid. You believe the impairment is required. Identify the fundamental principles at risk.

Show the solution
  1. Fact: the finance director wants a required loss delayed to protect a bonus.
  2. Integrity: knowingly leaving out a loss you believe is needed would make the accounts misleading, and you would be associated with them.
  3. Objectivity: the bonus and pressure from a senior colleague threaten your independent judgement.
  4. Professional behaviour: failing to follow IAS 36 breaches relevant standards and could discredit the profession.
  5. Action: document your view, explain the IAS 36 requirement to the finance director, escalate to the audit committee if refused, and take legal or professional advice if needed.

Answer: Integrity is the main principle at risk, followed by objectivity and professional behaviour. You should not agree to delay the impairment and should escalate if the pressure continues.

Example 2

Akash, an ACCA member, is asked by his employer to prepare a consolidation involving a complex foreign subsidiary and hedge accounting. He has no experience of either. He accepts without saying anything and uses a template from a prior year. Discuss the ethical issues.

Show the solution
  1. Fact: Akash lacks the knowledge but accepts silently.
  2. Professional competence and due care: he must have the skill needed for the work. Relying on a template without understanding it is not diligent.
  3. Integrity: staying silent about his limits may imply a competence he does not have, so the employer is misled.
  4. Professional behaviour: errors in the accounts could breach IFRS requirements and harm the profession's reputation.
  5. Action: tell the employer about the limits, seek training, supervision or specialist help, review the work with a qualified colleague and document it.

Answer: The main breach is professional competence and due care, with a secondary integrity concern. Akash should disclose his limits and obtain help before issuing the work.

Exam tips

  • Name the principle explicitly in your answer, then tie it to a named person or figure in the scenario.
  • Use the marking structure: identify, explain, recommend. Missing the recommendation loses marks.
  • Show professional skills: write in a measured tone, show scepticism about management explanations and consider all stakeholders.
  • Do not assume wrongdoing without evidence. Say 'appears to' or 'may' where facts are unclear.
  • Link ethics to the financial reporting standard involved so the answer shows both technical and ethical knowledge.

Practice questions from Professional and ethical behaviour in corporate reporting

Fundamental Ethical Principles in the ACCA Code in other exams

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

Fundamental Ethical Principles in the ACCA Code: frequently asked questions

What are the five fundamental principles in the ACCA Code?

They are integrity, objectivity, professional competence and due care, confidentiality, and professional behaviour. They apply to all ACCA members in every role.

What is the difference between integrity and objectivity?

Integrity is about being honest and straightforward and not being linked to misleading information. Objectivity is about keeping your judgement free from bias, conflicts of interest and undue influence. A false statement is an integrity issue; a biased decision under pressure is an objectivity issue.

Can an accountant ever disclose confidential information?

Yes, in limited cases. Disclosure is allowed with proper authority, or where the law or professional duty gives a right or obligation to disclose. Even then, you should consider advice before acting.

How do I answer SBR ethics questions on the fundamental principles?

Pick out the facts, name the principle at risk, explain why using the scenario, link to the reporting impact and recommend action. Keep the tone professional, since professional skills marks are available.