What you need to know in ACCA Code of Ethics and Conduct for exam? ACCA AB / AA / SBL / AAA Technic

Updated: Aug 18, 2020


ACCA Code of Ethics and Conduct (ACCA Code) is relevant to ACCA exam papers Accountant in Business (AB, was F1), Audit & Assurance (AA, was F8), Strategic Business Leader (SBL) and Advanced Audit & Assurance (AAA, was P7).

As this topic is easily seen in various papers, familiarising the knowledge and understanding how to apply in answering questions are crucial in passing the exams.

This article presents the basic concepts of ACCA Code while some examples are extracted from ACCA Accountant in Business past paper exam for illustration.

Introduction

Before sharing the details of ACCA Code, I would like to introduce International Federation of Accountants (IFAC) to you first.

IFAC is the global organization for the accountancy profession dedicated to serving the public interest by strengthening the profession and contributing to the development of strong international economies.

IFAC is comprised of over 175 members and associates in more than 130 countries and jurisdictions. It develops international standards on ethics, auditing and assurance, education and public sector accounting standards.

Under IFAC, the International Ethics Standards Board for Accountants (IESBA) is an independent standard-setting body that serves the public interest by setting robust, internationally appropriate ethics standards, for professional accountants worldwide.

As a member body of the IFAC, ACCA is required to apply ethical standards that are at least as stringent as those stated in the IESBA code.

Here we can see the linkage between IFAC and ACCA on the Code of Ethics and Conduct.


ACCA Rulebook and Code of Ethics and Conduct

ACCA published Rulebook for all of its members, or appropriate to, students, affiliates or member firms of ACCA.

In the Rulebook, Section 3 is about ACCA Code of Ethics and Conduct which is set out in four parts.

Part A is applicable to all professional accountants, Part B is to professional accountants working in public practice, Part C is to professional accountants in business, and Part D is to professional accountants in United Kingdom who are insolvency practitioners.

In the following, the discussion is mainly on Part A which is the general application of the ACCA Code.


Fundamental principles

A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in the public interest.

Therefore, a professional accountant’s responsibility is not exclusively to satisfy the needs of an individual client or employer.

In acting in the public interest, a professional accountant shall observe and comply with ACCA Code.

Within ACCA Code, the Fundamental Principles are set out in Part A. It set out the obligations placed on all members, whether or not they are in practice. The five principles are set out below:

  • Integrity – to be straightforward and honest in all professional and business relationships.

  • Objectivity – to not allow bias, conflict of interest or undue influence of others to override professional or business judgments.

  • Professional Competence and Due Care – to maintain professional knowledge and skill at the level required to ensure that a client or employer receives competent professional services based on current developments in practice, legislation and techniques and act diligently and in accordance with applicable technical and professional standards.

  • Confidentiality – to respect the confidentiality of information acquired as a result of professional and business relationships and, therefore, not disclose any such information to third parties without proper and specific authority, unless there is a legal or professional right or duty to disclose, nor use the information for the personal advantage of the professional accountant or third parties.

  • Professional Behaviour – to comply with relevant laws and regulations and avoid any conduct that discredits the profession.