Level III Core · Guidance for Standard I: Professionalism

CFA Standard I(D) Misconduct: Rule and Examples

Updated 9 October 2026 · Fact-checked

Standard I(D) says 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. To solve a question, identify the act, test it for dishonesty or adverse reflection, then decide violation or not.

Understand Standard I(D) Misconduct

Standard I(D) Misconduct protects the reputation of the CFA designation and the investment profession. The idea is simple. Clients and the public trust charterholders. Dishonest or discreditable behaviour damages that trust, even when no client loses money.

The Standard has two parts. First, it bans conduct involving dishonesty, fraud or deceit. Second, it bans any act that reflects adversely on your professional reputation, integrity or competence. The second part is wider. It can catch conduct that is not strictly fraud.

The Standard covers professional conduct and also acts in your personal life when they bear on your integrity, reputation or competence. The Standard does not try to police private behaviour in general. It does not cover every personal mistake. Supervisory responsibility for others' conduct is addressed under Standard IV(C), separately from your own conduct under I(D). Its purpose is to catch conduct that shows a lack of honesty or fitness to do the work.

The Standard is not the same as I(C) Misrepresentation. I(C) is about false or misleading statements made to others in your professional activities, such as inflating a track record or plagiarising. I(D) is about the character of the conduct itself. One act can breach both. For example, deliberately falsifying a performance record is a misrepresentation and also dishonest conduct.

The Standard does not require a criminal conviction. A court case is not needed for a violation, and a minor legal issue unrelated to honesty or competence may not breach it. Examiners ask you to judge the facts, so focus on honesty and professional fitness.

Key rules to remember

Standard I(D) rule: 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.; Learn the two limbs: dishonest conduct, and acts that reflect adversely on reputation, integrity or competence.
Test for violation: Violation if the act involves dishonesty, fraud or deceit, OR reflects adversely on reputation, integrity or competence.; Either limb is enough. The act need not be a crime and no client loss is needed.
Compliance practice: Firms should develop and adopt a code of ethics, disseminate policies prohibiting misconduct, and check the references and backgrounds of prospective employees.; These are the recommended firm-level compliance steps in the guidance for I(D).

How to solve Standard I(D) Misconduct questions

Use this method for any I(D) item set or essay question. Keep the answer tied to the facts given.

1Identify the act or behaviour in the vignette and who performed it.
2Ask whether it involves dishonesty, fraud or deceit. Look for lying, hiding facts, falsifying or cheating.
3If not, ask whether it reflects adversely on professional reputation, integrity or competence. Consider whether a reasonable person would lose trust.
4Check whether the act is professional conduct or personal conduct that bears on honesty, integrity or fitness for the work.
5Consider whether another Standard also applies, such as I(C) for false statements, then pick the one the question asks for.
6State the conclusion: violation or no violation, then give one reason in the fewest words.
7If asked for action, give the corrective step, such as stop, disclose to the employer, or adopt a policy.

Quickest way: Two-limb quick test

When to use it: Use it in item sets when you must pick a violation or no-violation answer fast.

Ask: Is there lying, cheating, fraud or concealment? If yes, I(D) is violated.
If no, ask: Would this damage trust in this person's honesty, reputation or competence? If yes, likely violated.
If the act is a personal matter unrelated to honesty or work fitness, lean towards no violation.
Eliminate options that require a conviction or a client loss, as neither is needed.

Common mistakes in Standard I(D) Misconduct

Thinking a criminal conviction is needed for a violation.
Students link misconduct with crime.
Fix: Remember the test is dishonesty or adverse reflection. A conviction is not required.
Assuming all personal conduct is covered.
The words 'reflects adversely' sound very broad.
Fix: Only conduct that bears on honesty, integrity, reputation or competence counts. A private matter with no such link is not a violation.
Confusing I(D) with I(C) Misrepresentation.
Both involve dishonesty.
Fix: I(C) concerns false or misleading statements to others. I(D) concerns dishonest or discreditable conduct. Answer the Standard the question names, and note overlap if it is asked.
Requiring client harm.
Students expect a loss to exist.
Fix: Dishonest conduct breaches the Standard even if nobody lost money.
Writing long answers with no link to the facts.
Students recite the Standard.
Fix: State the conclusion, then name the specific act and the limb it breaches.

Worked examples

Example 1

An analyst at an asset manager submits a travel expense claim that includes personal holiday costs, labelled as client meetings. Does this violate Standard I(D)?

Show the solution

Identify the act: the analyst falsely labelled personal costs as business expenses to obtain reimbursement.
Test limb one: this involves dishonesty and deceit towards the employer.
Test limb two: it also reflects adversely on integrity.
Check for a loss: the employer's loss is not needed, but here it exists anyway.

Answer: Yes. The analyst violated Standard I(D) because falsifying the claim is dishonest conduct that reflects adversely on integrity.

Example 2

A portfolio manager is fined by a road authority for a minor parking offence while on holiday. Has the manager violated Standard I(D)?

Show the solution

Identify the act: a minor parking offence in a private setting.
Test limb one: there is no dishonesty, fraud or deceit.
Test limb two: the offence does not reflect on professional integrity, reputation or competence.
Note that a legal breach alone does not decide the matter. The link to honesty or fitness for the work does.

Answer: No. The act is a minor private matter with no link to honesty, integrity or competence, so Standard I(D) is not violated.

Exam tips

Look for words like falsified, concealed, cheated or misled. They signal I(D) or I(C).
If the question asks you to choose between I(C) and I(D), ask whether a false statement was made to others or whether the conduct itself was dishonest.
In essay sets, give the verdict first, then one reason tied to the facts, and answer only what the command word asks.
Remember that no conviction and no client loss are needed. Options that require them are usually wrong.
Watch for personal conduct cases. Decide if the act touches honesty, integrity or competence.

Standard I(D) Misconduct in other exams

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

Standard I(D) Misconduct: frequently asked questions

What does CFA Standard I(D) Misconduct prohibit?

It prohibits professional conduct involving dishonesty, fraud or deceit. It also prohibits acts that reflect adversely on your professional reputation, integrity or competence.

What is the difference between misconduct and misrepresentation in the CFA Standards?

Misrepresentation under I(C) is about false or misleading statements or omissions in professional activities. Misconduct under I(D) is about dishonest or discreditable conduct more broadly. The same act can breach both.

Does Standard I(D) cover personal conduct?

It can, when the personal conduct involves dishonesty or reflects adversely on your integrity, reputation or competence. Private matters with no such link are not covered.

Do I need to be convicted of a crime to violate Standard I(D)?

No. A violation depends on the dishonest or discreditable nature of the conduct, not on a conviction or on any client loss.