CFA Level I Exam · Code of Ethics and Standards of Professional Conduct

Professionalism: Standards I(A) to I(D) in the CFA Code of Ethics

Updated 7 October 2026 · Fact-checked

Standard I (Professionalism) has five parts. This page covers the first four: I(A) Knowledge of the Law, I(B) Independence and Objectivity, I(C) Misrepresentation and I(D) Misconduct. I(E) Competence is not covered here. To solve questions, identify the conduct, find the matching standard, then choose the action that follows the stricter rule, stays honest, and protects your integrity.

Understand Professionalism: Standards I(A) to I(D)

Standard I covers how you behave as a professional before any client, employer or market issue arises. It has five parts. This page covers I(A) to I(D) and does not cover I(E) Competence. The four parts here ask four things: know and obey the rules, stay independent, never mislead, and keep your personal conduct clean.

I(A) Knowledge of the Law. You must understand and comply with all applicable laws, rules and regulations, including the CFA Institute Code and Standards. When laws conflict, you must comply with the stricter one. That can be the law, or the Code and Standards. You must not knowingly participate or assist in any violation. If you know of one, you must dissociate from it. At a minimum, dissociation means you stop participating or assisting. If the violation continues, you should confront the violator and report the matter to your supervisor or compliance. Reporting to CFA Institute or to a regulator is not required by this standard itself, though the Professional Conduct Program may ask for cooperation.

I(B) Independence and Objectivity. You must use reasonable care and judgment to achieve and maintain independence and objectivity in your professional activities. You must not offer, solicit or accept any gift, benefit or compensation that could reasonably be expected to compromise your own or another's independence and objectivity. Pressure can come from clients, issuers, investment banking relationships, and gifts or travel. Modest gifts are not automatically a violation. The test is whether they could reasonably compromise your objectivity, and disclosure helps.

I(C) Misrepresentation. You must not knowingly make any misrepresentation relating to investment analysis, recommendations, actions or other professional activities. This includes false statements about your qualifications or services, plagiarism (using others' work without attribution), and omitting key facts. Using a firm's or a colleague's work with proper credit is fine. Passing off someone else's research as your own is not.

I(D) Misconduct. You must not engage in any professional conduct involving dishonesty, fraud or deceit, or commit any act that reflects adversely on your professional reputation, integrity or competence. It covers professional conduct. Personal behavior counts only when it reflects on honesty, integrity or competence. A minor traffic fine is not a violation. Embezzlement or fraud is.

Key formulas to remember

I(A) Knowledge of the Law: Members and Candidates must understand and comply with all applicable laws, rules, and regulations (including the Code and Standards) of any government, regulatory organization, licensing agency, or professional association governing their professional activities. In the event of conflict, Members and Candidates must comply with the more strict law, rule, or regulation. Members and Candidates must not knowingly participate or assist in and must dissociate from any violation of such laws, rules, or regulations.; Stricter rule wins. If you know of a violation, dissociate: at a minimum, stop participating. If the violation continues, confront the violator and report to your supervisor or compliance. Reporting to CFA Institute or a regulator is not required by the standard itself.
I(B) Independence and Objectivity: Members and Candidates must use reasonable care and judgment to achieve and maintain independence and objectivity in their professional activities. Members and Candidates must not offer, solicit, or accept any gift, benefit, compensation, or consideration that reasonably could be expected to compromise their own or another's independence and objectivity.; Test: could it reasonably compromise objectivity? Disclosure and firm policy help but do not cure a real compromise.
I(C) Misrepresentation: Members and Candidates must not knowingly make any misrepresentation relating to investment analysis, recommendations, actions, or other professional activities.; Includes plagiarism, false credentials, misleading performance claims and omitting relevant facts.
I(D) Misconduct: Members and Candidates must not engage in any professional conduct involving dishonesty, fraud, or deceit or commit any act that reflects adversely on their professional reputation, integrity, or competence.; Covers dishonesty, fraud and deceit. It is not a general ban on every private mistake.
Conflict rule of thumb: Law stricter than Code: follow the law. Code stricter than law: follow the Code.; In a country with no law on the point, follow the Code and Standards.

How to solve Professionalism: Standards I(A) to I(D) questions

Use the same sequence for every Standard I question. It keeps you from being pulled by attractive but wrong options.

1Read the stem and name the conduct: breaking a rule, accepting a benefit, stating something untrue, or personal behavior.
2Match it to the standard: law or conflict of rules is I(A), pressure or gifts is I(B), false or copied statements is I(C), dishonest acts is I(D).
3Ask whether the member acted knowingly or only was at risk. I(A) and I(C) hinge on knowing participation or misrepresentation.
4Apply the exact test: stricter rule, could reasonably compromise, misrepresentation or plagiarism, dishonesty or fraud reflecting on integrity.
5Decide if there is a violation. If there is, say which one. If the question asks for the best action, choose the one that stops the problem and keeps integrity.
6Eliminate the two weaker options: one that ignores the stricter rule or the facts, and one that is extreme or irrelevant, such as resigning when disclosure would solve it.
7Check that your pick uses the most direct duty, not a different standard.

Quickest way: Four-trigger scan

When to use it: Use it when time is short and the stem is a short scenario with three options.

Scan for the trigger: law conflict (I(A)), gift or pressure (I(B)), false or copied claim (I(C)), dishonest act (I(D)).
Mark the key word: stricter, compromise, knowingly, plagiarism, fraud or deceit.
Reject options that follow the weaker rule or pretend the issue does not matter.
Pick the option that complies with the stricter rule, refuses the benefit or discloses, corrects the statement with attribution, or avoids dishonest conduct.

Common mistakes in Professionalism: Standards I(A) to I(D)

Following the local law when the Code is stricter.
Candidates assume legal compliance is enough.
Fix: Compare the two. Always follow the stricter, and if there is no law, follow the Code.
Treating any gift as a violation of I(B).
The standard sounds absolute.
Fix: Apply the test: could it reasonably be expected to compromise independence and objectivity? Small, token items often do not, and disclosure helps.
Thinking I(A) requires reporting every violation to CFA Institute.
Confusion with other duties.
Fix: I(A) requires dissociation from a known violation. At a minimum, stop participating. If the violation continues, confront the violator and report to your supervisor or compliance. The standard itself does not mandate reporting to the Institute or to regulators.
Missing plagiarism as misrepresentation.
Candidates think misrepresentation means only lying about performance.
Fix: Copying others' work or models without credit is misrepresentation under I(C).
Treating every personal act as misconduct under I(D).
The wording about reputation seems broad.
Fix: I(D) targets dishonesty, fraud, deceit or acts that reflect on integrity or competence. Unrelated private matters usually do not qualify.
Confusing independence and objectivity with misrepresentation.
Both involve honesty.
Fix: I(B) is about influences that bias your judgment. I(C) is about false or misleading statements you make.

Worked examples

Example 1

An analyst works in a country where local law permits a practice that the CFA Institute Code and Standards prohibit. Which action is most consistent with Standard I(A)? A. Follow the local law, because it is the law of the country where she works and it permits the practice. B. Follow the Code and Standards and do not engage in the practice, because they impose the stricter requirement. C. Follow the local law, but only if the client agrees.

Show the solution

The conduct involves a conflict between local law and the Code and Standards, so this is I(A).
I(A) says that in a conflict, you comply with the more strict law, rule or regulation.
Compare the two rules. The law permits the practice, while the Code and Standards prohibit it. The prohibition is the stricter rule, so the Code and Standards govern her conduct.
Option A follows the weaker rule. Option C fails because client agreement does not remove the duty to follow the stricter rule.

Answer: B

Example 2

A research analyst is offered a free luxury holiday by a company he covers, shortly before he updates his rating. He reasons that the trip is personal and will not change his view. What is the best conclusion? A. No violation, because he intends to stay objective. B. Accepting would likely violate Standard I(B), because it could reasonably be expected to compromise his objectivity. C. Accepting would violate Standard I(C), because it is a misrepresentation.

Show the solution

The facts involve a benefit from a company the analyst covers, so I(B) is the relevant standard.
The test is whether the benefit could reasonably be expected to compromise independence and objectivity, not whether the analyst says it will.
A luxury holiday from a covered company before a rating change meets that test.
Option A relies on his intent, which is not the test. Option C is wrong because no false statement has been made.

Answer: B

Exam tips

Look for the keyword in the stem: stricter points to I(A), gift or pressure to I(B), copying or false claim to I(C), fraud or dishonesty to I(D).
Intent alone never cures an I(B) problem. The test is what could reasonably compromise objectivity.
For I(A), remember that dissociation is the minimum when you know of a violation. If it continues, confront the violator and report to supervisor or compliance. Do not choose options that continue to participate.
If a question mentions a country with no law on the point, follow the Code and Standards.
With no penalty for wrong answers, never leave a blank. Remove the option that ignores the stricter rule or the facts, then choose between the other two.

Practice questions from Code of Ethics and Standards of Professional Conduct

Professionalism: Standards I(A) to I(D) in other exams

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

Professionalism: Standards I(A) to I(D): frequently asked questions

What does Standard I(A) say about the most strict law?

When applicable laws, rules or regulations conflict, you must comply with the more strict one. That could be the law of the country or the Code and Standards. If the law is silent or weaker, follow the Code and Standards.

What is the difference between independence and objectivity and misrepresentation?

Standard I(B) is about influences that could bias your judgment, such as gifts or pressure from issuers or clients. Standard I(C) is about knowingly making false or misleading statements, including plagiarism or false credentials. One concerns bias, the other concerns what you communicate.

What are examples of misconduct under Standard I(D)?

Examples include fraud, embezzlement, falsifying records, lying to clients or employers, and other dishonest acts that reflect on your integrity or competence. Purely private matters that have no link to honesty, integrity or professional competence are generally not covered.

Do I have to report a colleague's violation to CFA Institute under I(A)?

No, the standard itself does not require it. Standard I(A) requires you to dissociate from known violations, which at a minimum means you stop participating or assisting. If the violation continues, you should confront the violator and report to your supervisor or compliance. Reporting to CFA Institute or a regulator is not required by the standard itself.