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

ACCA Code of Ethics and Conduct (ACCA Code) is relevant to ACCA exam papers Business and Technology (BT, 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.


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.

ACCA Code of Ethics and Conduct: Fundamental Principles

Next step after the Fundamental Principles is a conceptual framework provided in the ACCA Code for application.

Conceptual framework

According to the conceptual framework, professional accountants shall apply to:

  • Identify threats to compliance with the fundamental principles;

  • Evaluate the significance of the threats identified; and

  • Apply safeguards, when necessary, to eliminate the threats or reduce them to an acceptable level.

The conceptual framework approach assists professional accountants in complying with the ethical requirements of ACCA Code and meeting their responsibility to act in the public interest.

It accommodates many variations in circumstances that create threats to compliance with the fundamental principles and can deter a professional accountant from concluding that a situation is permitted if it is not specifically prohibited.

Threats and safeguards

Threats may be created by a broad range of relationships and circumstances. The various categories of threat discussed within ACCA Code are:

  • Self-interest;

  • Self-review;

  • Advocacy;

  • Familiarity; and

  • Intimidation.

Safeguards are actions or other measures that may eliminate threats or reduce them to an acceptable level. Two broad categories are found:

  1. Safeguards created by the profession, legislation or regulation; and

  2. Safeguards in the work environment.

Examples of safeguards mentioned in ACCA Code include:

  • Educations, training and experience requirements for entry into the profession;

  • Continuing professional development requirements;

  • Corporate governance regulations;

  • Professional standards;

  • Professional or regulatory monitoring and disciplinary procedures;

  • External review by a legally empowered third party of the reports, returns, communications or information produced by a professional accountant.

ACCA Code of Ethics and Conduct: Conceptual Framework

Conflicts of interest and Ethical conflict resolution

Conflicts of interest may exist in front of a professional accountant when undertaking a professional activity.

A conflict of interest creates a threat to objectivity, one of five Fundamental Principles, and may create threats to the other Fundamental Principles too.

An example of threat is a professional accountant undertakes a professional activity related to a particular matter for two or more parties whose interests with respect to that matter are in conflict.

Sometimes, professional accountant is required to resolve a conflict in complying with the Fundamental Principles.

There may be many possibilities to resolve the conflict, but it may be in the best interests of the professional accountant to document the substance of the issue, the details of any discussions held, and the decisions made concerning that issue.

If, after exhausting all relevant possibilities, the ethical conflict remains unresolved, a professional accountant shall refuse to remain associated with the matter creating the conflict.

In some circumstances, withdraw from the engagement team or specific assignment from the employing organisation is appropriate given the conflict remains unresolved.


Example 1 (ACCA BT past paper)

Professional accountants must demonstrate integrity at all times

Which of the following best describes the meaning of integrity?

  1. Applying consistently high moral values

  2. Maintaining a neutral and unbiased view on all business decisions

  3. Providing timely and accurate information free from errors

The correct answer is A.

Integrity is about honestly and applying morality to business and professional behaviour. A person acting with integrity should not be corruptible. Neutrality in the making of business decisions does not indicate morality nor does producing accurate work, which is more about professional competence.

Example 2 (ACCA BT past paper)

An investment firm allocates “hot” new shares of an initial public offering to its largest fee-paying clients first.

Which IFAC code of ethics fundamentals appears to be violated?

A Confidentiality

B Integrity

C Objectivity

The correct answer is C

The objectivity principle is violated as the investment firm gave preferential treatment to its largest fee-paying customers and did not have a fair procedure in place to allocate the IPO shares to its clients.

For more ACCA Business and Technology (BT, was F1) information, please CLICK HERE for details.


This article shares to you on all basic concepts and principles in ACCA Code of Ethics and Conduct.

As said, ACCA Code applies to members, students and affiliates. It is very important for you to demonstrate the highest ethical standard which comply with ACCA Code.

In addition, you could easily find a lot of exam questions in Accountant in Business, Audit & Assurance, Strategic Business Leader and Advanced Audit & Assurance, relevant to the ACCA Code.

Frequently revising the ACCA Code can help you in exam as well as your professional career.

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