Skip to content

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

Which of the following BEST describes the approach of a principles-based professional code of ethics, as used by ACCA, compared with a rules-based approach?

A principles-based code requires members to apply the fundamental principles and use professional judgement to identify, evaluate and address threats to compliance, applying safeguards where necessary. It differs from a rules-based approach, which tries to prescribe a rule for every situation.

  1. AIt lists a specific rule for every possible situation so that no judgement is needed
  2. BIt applies only to members working in public practice
  3. CIt requires members to apply fundamental principles and use judgement to identify, evaluate and address threats to complianceCorrect
  4. DIt allows members to ignore the code where the law does not require compliance

Explanation

A principles-based framework sets out fundamental principles and expects members to use judgement to identify, evaluate and respond to threats, applying safeguards where needed. A rules-based approach tries to list rules for every case. The code applies to all members, not just those in practice, and it goes beyond what the law requires.

Did you get it right without looking?

One question tells you little. A timed set on The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession shows your real accuracy, how long you take and where you lose marks.

Practise The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy professionFree diagnostic mock

More The role of regulatory and professional bodies in promoting ethical and professional standards in the accountancy profession questions