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ACCA Applied Knowledge · Business and Technology · The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession

A principles-based ethical code, such as the one adopted by ACCA, is best described as one which:

A principles-based code sets out fundamental principles, such as integrity and objectivity, and requires accountants to apply professional judgement to the situation in front of them. It does not attempt to list a rule for every situation, which is the rules-based approach.

  1. ALists a specific rule for every possible situation an accountant may face
  2. BSets out fundamental principles and requires professional judgement in applying them to circumstancesCorrect
  3. CApplies only to accountants in public practice
  4. DIs enforceable only by criminal courts

Explanation

A principles-based code sets out fundamental principles and expects accountants to use judgement and the conceptual framework to apply them. A rules-based code would list detailed rules for every situation. The IESBA Code applies to accountants in practice and in business, and ACCA enforces it through its disciplinary process.

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