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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

Which of the following is the most commonly cited advantage of self-regulation of the accountancy profession, compared with regulation by the state?

The main advantage of self-regulation is that the profession's own technical expertise is used to set practical, workable standards. Independence is its weakness, since members regulate themselves, and imprisonment is a state power, so those alternatives are not advantages of self-regulation.

  1. AMembers' technical expertise is used to set practical standards and rulesCorrect
  2. BIndependence from members' interests is guaranteed
  3. CSanctions can include imprisonment of members
  4. DPublic confidence is automatically higher

Explanation

Self-regulation draws on the specialist knowledge of practitioners, so rules tend to be practical and flexible and cheaper for the state. Independence is the usual weakness, not a strength, because members regulate themselves. Imprisonment is a power of the courts, not of a professional body.

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