ICAEW AF · Chapter 2 · Question 4 of 7
What is the main advantage of a principles-based code of ethics compared with a rules-based code?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It can be applied to new and unusual situations that a list of specific rules would not anticipate
Explanation
A principles-based code sets out fundamental principles and a conceptual framework for identifying, evaluating and addressing threats. Because it relies on professional judgement, it can be applied to situations that rules could not foresee. Rules-based codes tend to encourage a 'box-ticking' approach in which anything not expressly prohibited is treated as allowed.
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