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Level III Core · Code of Ethics and Standards of Professional Conduct

CFA Standard I Professionalism Explained

Updated 9 October 2026 · Fact-checked

Standard I (Professionalism) sets four duties: know and follow the strictest applicable law or rule, stay independent and objective, never misrepresent facts or plagiarize, and avoid conduct involving dishonesty, fraud or deceit. To solve a question, find the conduct, name the standard, apply the strictest-rule test, then state the action.

Understand Professionalism (Standard I)

Standard I covers how you behave as a professional. It has five parts: I(A) Knowledge of the Law, I(B) Independence and Objectivity, I(C) Misrepresentation, I(D) Misconduct and I(E) Competence. This page covers the first four. I(E) has its own page.

Knowledge of the Law, I(A). You must understand and comply with all laws, rules and regulations that apply to you, including the Code and Standards. When the law and the Code differ, you follow the stricter one. If you are in a country with no securities law, you still follow the Code. If you know of a violation by others, you must not take part in it or help it. You must dissociate from the activity. If the firm does not act, you should consider reporting the violation to the authorities. Disclosure to authorities is encouraged but is not required by the Standards unless the law requires it. If dissociation (for example, confronting the wrongdoer, or going to supervisors or compliance) does not stop the violation, you should consider ceasing the activity or ending the professional relationship.

Independence and Objectivity, I(B). Your judgment must not be compromised by gifts, benefits, pressure or relationships. Independence is about the absence of improper influence. Objectivity is about the quality of the judgment itself: fair, unbiased and based on the facts. Typical risks: gifts from clients or issuers, investment banking ties, issuer-paid research, credit rating fees paid by the issuer, and pressure from the board or senior staff. Firms should maintain firewalls and separate research from investment banking to protect independence. Modest gifts may be acceptable if disclosed to your employer. A gift that could make you favor one party is a problem.

Misrepresentation, I(C). You must not knowingly make a false statement or leave out facts that make a statement misleading. This covers recommendations, performance, qualifications, services and your firm. Plagiarism is a form of misrepresentation: using others' work without credit. Citing a source is the fix. Using a third party's research without checking and then presenting it as your own work is also a risk. Do not guarantee returns on investments that are not guaranteed.

Misconduct, I(D). You must not engage in professional conduct involving dishonesty, fraud or deceit, or commit acts that reflect poorly on your professional reputation, integrity or competence. It covers acts at work and personal acts tied to dishonesty, such as embezzlement or lying on a tax return. It does not cover purely private matters unrelated to honesty or competence. A conviction is not required; the standard looks at the conduct.

Key rules to remember

Strictest rule (I(A))
Applicable law vs Code: follow the stricter one
If the law is stricter, follow the law. If the Code is stricter, follow the Code. Do not break the law to meet the Code.
Violation by others (I(A))
Do not participate or assist; dissociate; consider reporting
Dissociation can mean telling your supervisor or compliance and stopping any involvement. If that fails, consider ceasing the activity or relationship. Reporting to authorities is encouraged but not always required by the Standards.
Independence vs objectivity (I(B))
Independence = free from improper influence; Objectivity = unbiased, fact-based judgment
Use the word that matches the problem in the vignette: pressure or benefit points to independence; biased analysis points to objectivity.
Misrepresentation test (I(C))
Knowingly false statement OR misleading omission OR plagiarism = violation
I(C) prohibits knowingly making misrepresentations. Misleading omissions and plagiarism also count. If you find a misstatement you made earlier, correct it.
Misconduct test (I(D))
Dishonesty, fraud, deceit, or acts harming professional reputation, integrity or competence
Conduct is judged on the act. A criminal conviction is not needed.

How to solve Professionalism (Standard I) questions

Use this order for any Standard I question, whether it is a multiple-choice item in an item set or an essay asking you to identify violations and recommend action.

  1. 1Read the command word first: identify, determine, justify or recommend. It tells you how much to write.
  2. 2List the facts that show what the member did or failed to do. Ignore facts that do not affect conduct.
  3. 3Match each fact to a sub-standard: law or rule (A), influence or bias (B), false or misleading statement or copied work (C), dishonest or reputation-damaging act (D).
  4. 4For I(A) cases, compare the local law with the Code and apply the stricter one. Check whether the member knew of a violation.
  5. 5For I(B) cases, check for gifts, compensation, relationships or pressure. Ask: could a reasonable person doubt the member's judgment?
  6. 6For I(C) and I(D), check whether the statement was false, misleading or copied, or whether the act involved dishonesty.
  7. 7State the conclusion clearly: violated or did not violate, and name the standard.
  8. 8Give the corrective action asked for in the fewest words, such as dissociate, disclose, decline, cite the source or correct the statement.

Quickest way: Four-question filter

When to use it: Use when you have about two minutes per question and the vignette is long.

  1. Is a law or rule involved? If yes, apply the stricter of law and Code: I(A).
  2. Is the member's judgment shaped by a benefit or pressure? If yes: I(B).
  3. Is something false, misleading, omitted or copied? If yes: I(C).
  4. Is there dishonesty, fraud or damage to reputation? If yes: I(D).
  5. Pick the option that names the right standard and the action that fixes the problem. Eliminate options that break the stricter rule.

Common mistakes in Professionalism (Standard I)

  • Following the Code when local law is stricter.

    Students think the Code always wins.

    Fix: Remember the rule is the stricter one. If the law requires more, follow the law.

  • Saying a member who knows of a colleague's violation must always report it to the regulator.

    The words dissociate and report get mixed.

    Fix: The member must not participate and should dissociate. Reporting is encouraged, and may be required by law, but the Standards do not make it automatic.

  • Treating independence and objectivity as the same thing.

    Both appear in the same standard.

    Fix: Independence is freedom from improper influence. Objectivity is unbiased judgment. Name the one the facts point to.

  • Calling any gift a violation.

    Students overlearn the risk of conflicts.

    Fix: Gifts that could compromise judgment are the issue. Modest gifts may be fine, and disclosure to the employer is the safe step.

  • Thinking a legal act cannot be misconduct.

    Students link misconduct only to crime.

    Fix: Misconduct covers dishonesty, fraud, deceit or acts that harm reputation, even if no conviction occurs.

  • Missing plagiarism as misrepresentation.

    Students look only for false numbers.

    Fix: Copying others' work without credit, including a firm's or a third party's, is misrepresentation under I(C).

Worked examples

Example 1

Two CFA charterholders face different situations. Charterholder A works in Country X, where the law allows firms to republish another firm's research under their own name without crediting the source. Charterholder B works in Country Y, where the law has no rule on disclosing a referral fee received for sending a client to another firm. What must each do?

Show the solution
  1. Identify the standard: I(A) Knowledge of the Law tells each member to apply the stricter of the law and the Code. Referral fees are also covered by Standard VI(C), Referral Fees.
  2. Charterholder A: the law permits republishing without credit, but Standard I(C) treats this as plagiarism and prohibits it. The Code is stricter, so A follows the Code and credits the source.
  3. Charterholder B: the law is silent on referral fees, but Standard VI(C) requires disclosure of any compensation or benefit received for a referral. The Code is stricter, so B follows the Code and discloses the fee.
  4. In both cases, following the Code does not break the law. The law only permits the conduct or is silent, so there is no conflict in complying with the Code.

Answer: A must follow the Code, not the permissive law, and credit the source of the research. B must follow the Code and disclose the referral fee under Standard VI(C), even though local law does not require it.

Example 2

An analyst at a research firm is asked by the head of corporate finance to upgrade a rating on a company the firm is helping to raise capital. The analyst's own work supports a Hold. She upgrades to Buy and does not mention the pressure. Which standard is violated, and what should she do?

Show the solution
  1. Identify the facts: a senior colleague pressured her, and she changed the rating against her own analysis.
  2. Match to I(B): her judgment was influenced by an improper pressure, so independence and objectivity were compromised.
  3. Check I(C): she knowingly published a Buy rating that does not reflect her analysis, so it misleads clients as well.
  4. State the corrective action: she should withdraw or correct the Buy rating she has already published, reinstate the Hold her analysis supports, and report the pressure to compliance or a supervisor.

Answer: She violated I(B) Independence and Objectivity and I(C) Misrepresentation. She should withdraw or correct the Buy rating, reinstate the Hold her analysis supports, and report the pressure to compliance.

Exam tips

  • Name the standard and the sub-part in the first line. It earns the identification point quickly.
  • For recommend or determine command words, give the violation and the action in separate short sentences.
  • If an answer option mentions following the weaker rule, eliminate it at once.
  • Look for hidden facts: a gift, an issuer-paid fee, a copied paragraph or a missing source. Those flag I(B) and I(C).
  • In essay answers, give only the number of responses asked for. Extra items may not be evaluated.

Professionalism (Standard I) in other exams

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

Professionalism (Standard I): frequently asked questions

What does Standard I cover in the CFA Code and Standards?

Standard I is Professionalism. It covers knowledge of the law, independence and objectivity, misrepresentation, misconduct and competence. This page deals with the first four.

What is the difference between independence and objectivity?

Independence means you are free from improper influence such as gifts, pressure or relationships. Objectivity means your judgment is fair and based on the facts. You can lose objectivity through bias even without outside pressure.

What should I do if local law conflicts with the Code?

Follow the stricter of the two. If the law is stricter, follow the law. If the Code is stricter and following it does not break the law, follow the Code.

Is plagiarism a violation of Standard I?

Yes. Using someone else's work without crediting the source is misrepresentation under I(C). Citing the source and not claiming others' work as your own avoids the violation.