Page 19 - P5 Integrated Workbook TUTOR 2017-18
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Code of ethics and conduct
The Conceptual Framework
There are two main approaches to ethical guidance:
Principles based Rules based
Flexible, so can be applied to new, May be easier to follow because it is
unusual or rapidly changing clearly defined
situations
Needs frequent updating to ensure
Principles may be applied across the guidance applies to new
national boundaries where laws situations
may not
May encourage accountants to
Encourages the accountant to use interpret requirements narrowly in
judgment order to get round the spirit of the
requirements.
Requires compliance with the spirit
of the guidance
Can still incorporate specific rules
for ethical situations likely to affect
many firms.
A conceptual framework relies on a principles-based approach rather than a rules-
based approach.
The International Federation of Accountants has issued a Code of Ethics which
follows a conceptual framework approach.
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