ExpertFundamental Ethical Principles
Learning outcomes
- Define the five ACCA/IESBA Fundamental Ethical Principles.
The Five Fundamental Principles
All ACCA members must comply with the IESBA Code of Ethics. The five principles are:
- Integrity: Be straightforward and honest in all professional relationships.
- Objectivity: Do not allow bias, conflict of interest, or undue influence of others to override professional judgments.
- Professional Competence and Due Care: Maintain professional knowledge and act diligently according to technical standards.
- Confidentiality: Respect the confidentiality of information acquired; do not disclose it without proper authority.
- Professional Behaviour: Comply with relevant laws and avoid any action that discredits the profession.
An accountant is asked to prepare a tax return for a complex international merger, but they have no training in international tax law. If they accept the job, which principle are they violating?
Confidentiality Exceptions
Confidentiality is not absolute. You MUST break confidentiality if required by law (e.g., reporting money laundering). You MAY break it if you have the client's permission, or if there is a professional right/duty to disclose (e.g., defending yourself in a disciplinary hearing).
Integrity vs Objectivity
Integrity is about telling the truth. If a client asks you to hide a loss, and you do it, you lack integrity. Objectivity is about independence of mind. If you audit a company owned by your brother, you might be honest, but you lack objectivity because of the family tie.
An auditor discovers that the CEO of the company they are auditing is their spouse. The auditor decides to continue the audit anyway. Which principle is most directly threatened?
Exam Focus
Memorize the exact names of the 5 principles. Examiners will try to trick you with fake principles like 'Transparency' or 'Independence'. While good concepts, they are NOT the official 5 principles.
Which of the following is NOT one of the five fundamental ethical principles of the ACCA?
An accountant is convicted of a serious criminal offence outside of work (e.g., violent assault). Which ethical principle does this breach?
Under which circumstance is an accountant legally REQUIRED to breach client confidentiality?
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ACCA BT — Business & Technology Practice Exam 1
A premium, complete mock exam replication for ACCA BT (Business & Technology). This exam mirrors live computer-based testing parameters, featuring 46 objective test questions (Section A) and 6 multi-task scenario questions (Section B). It covers the entire syllabus: Business Organization, Structure & Governance, Technology & Regulation, Leadership, Personal Effectiveness, and Professional Ethics.