## **Learning Outcomes**

After reading this article, you will be able to state the principle of professional behaviour from the ACCA Code of Ethics, explain what is required to maintain the reputation of the profession, and identify conduct that could discredit the accountancy profession. You will be able to recognise real-world scenarios where professional behaviour may be threatened and outline appropriate actions to maintain ethical standards.

## **ACCA Foundations in Audit (FAU) Syllabus**

For ACCA Foundations in Audit (FAU), you are expected to understand how professional ethics guide auditor conduct. In this article, we focus on:

- The fundamental principles of ethics, with an emphasis on professional behaviour
- Application of professional behaviour in various contexts
- Identification and management of threats to professional behaviour and reputation
- Examples of conduct that may breach professional behaviour
- The requirement to avoid actions that harm the profession’s reputation

## **Test Your Knowledge**

_Attempt these questions before reading this article. If you find some difficult or cannot remember the answers, remember to look more closely at that area during your revision._

1. Which of the following best describes 'professional behaviour' under the ACCA Code of Ethics?
   a) Always act in the firm's own best interests
   b) Comply with laws and avoid any conduct likely to damage the profession's reputation
   c) Only avoid illegal acts, not unethical acts
   d) Publicise the firm at all costs

2. An ACCA member makes exaggerated claims about their firm’s capabilities in a public advertisement. Which fundamental principle may be at risk?

3. True or false? Discussing confidential client matters at a public event is a potential breach of professional behaviour.

4. Briefly explain why auditors must consider how their actions appear to the public, not just whether they follow rules.

## **Introduction**

All accountants and auditors are required to follow a strict code of ethics, including the principle of professional behaviour. This principle goes beyond following the law. It demands acting in a way that maintains public trust in the profession, avoiding actions that could lower confidence in accountants or bring the profession into disrepute.

For exam and practical purposes, you should be able to clearly identify what professional behaviour is, recognise threats to it, and know what conduct could place reputation at risk.

> **Key Term: professional behaviour**
> Complying with laws and regulations while avoiding any conduct that an accountant knows or should know might discredit the profession.

## THE PRINCIPLE OF PROFESSIONAL BEHAVIOUR

### The ACCA Code and Professional Behaviour

The ACCA Code of Ethics and Conduct states that all members, students, and firms must comply with five fundamental principles. Professional behaviour requires you to avoid actions that may discredit the profession, as well as to uphold all relevant laws and regulations.

Real-world examples include avoiding misleading statements, refraining from unfair or deceptive promotion, and ensuring all professional activities are honest and above suspicion.

> **Key Term: discreditable conduct**
> Any action or omission, intentional or accidental, that could harm the accountancy profession’s good name, reputation, or public confidence.

## WHAT CONDUCT THREATENS PROFESSIONAL BEHAVIOUR?

Threats to professional behaviour commonly arise in situations involving:

- Misleading or exaggerated marketing of professional services
- Criticising another auditor or firm in public without justification
- Engaging in behaviour (online or offline) that could embarrass the profession
- Acting in a way that, even if legal, appears improper or untrustworthy

### **Worked Example 1.1**

**A qualified accountant regularly posts negative comments about a competitor on social media. Is this acceptable under the principle of professional behaviour? Why or why not?**

> **Answer:**
>
> - This behaviour is not acceptable. The ACCA Code requires respect for colleagues and forbids actions that discredit the profession. Publicly criticising another accountant online could harm public trust in accountants in general, risking a breach of the professional behaviour principle.

## HOW SHOULD ACCOUNTANTS MAINTAIN PROFESSIONAL BEHAVIOUR?

You must not only act legally and ethically but also be seen to do so. Professional behaviour means considering how actions are perceived by others, including clients, colleagues, and the wider public.

Key expectations include:

- Not making misleading, exaggerated, or unsubstantiated claims about services or capabilities
- Avoiding any form of dishonest, offensive, or unprofessional behaviour in any context (including outside work)
- Not accepting gifts or hospitality that could be seen as an inducement or that undermine impartiality

> **Key Term: public confidence**
> The reliance and trust placed by society in the competence, ethics, and conduct of the accountancy profession.
>
> **Key Term: reputation**
> The collective belief about the integrity, credibility, and reliability of accountants and auditors in fulfilling their responsibilities.

## EXAMPLES OF DISREPUTABLE CONDUCT

Breaching professional behaviour does not require criminal conduct. Examples that risk disciplinary action include:

- Publishing advertisements that overstate qualifications or achievements
- Making disparaging comments about colleagues or firms without evidence
- Failing to report knowledge of another professional’s serious misconduct
- Sharing confidential information in social settings
- Participating in activities (e.g. fraud, discrimination, or harassment) that damage the profession’s standing

### **Worked Example 1.2**

**A partner at an audit firm allows staff to use the firm’s letterhead to give a personal reference for a friend. What ethical principle may be at risk, and why?**

> **Answer:**
>
> - Allowing firm resources to support personal matters may be seen as misusing professional status and could mislead recipients about the opinion’s authority. This risks damaging public trust in the professional competence and neutrality of accountants, breaching professional behaviour.

### **Exam Warning**

> A common mistake is to assume that behaviour is only a problem if it breaks the law. In truth, even legal actions may breach professional behaviour if they risk public disapproval or reduce confidence in the profession.

## TAKING ACTION AGAINST THREATS

Threats to professional behaviour should be identified and addressed quickly. Appropriate responses include:

- Declining or withdrawing from situations that risk harm to the profession’s reputation
- Seeking advice from professional bodies if in doubt
- Reporting serious misconduct by others when required
- Recording actions taken to prevent further risk

> **Key Term: threats to professional behaviour**
> Situations or actions that could result in breaching the expected standard of conduct and damaging the public image of accountancy.

## **Summary**

Professional behaviour requires more than simply following rules or avoiding crimes. As an auditor or accountant, you must act—and be seen to act—in ways that preserve public trust, demonstrate honesty, and protect the reputation of the profession at all times, both inside and outside your professional role.

## **Key Point Checklist**

_This article has covered the following key knowledge points:_

- Professional behaviour requires compliance with law and avoidance of any conduct that could discredit the profession
- Threats can arise from behaviour in advertising, communications, social media, and daily interactions
- Accountants must consider public perception as well as actual conduct
- Breaches of professional behaviour do not need to be illegal to result in disciplinary action
- Addressing threats may require seeking guidance, declining engagements, or reporting misconduct

## **Key Terms and Concepts**

- professional behaviour
- discreditable conduct
- public confidence
- reputation
- threats to professional behaviour


Professional ethics and ACCA code - Professional behaviour