ICAEW SE · Chapter 7 · Question 16 of 18
What is a key advantage of a principles-based code of ethics, such as the ICAEW Code, compared with a rules-based code?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) It can be applied to new or unusual situations that specific rules do not anticipate
Explanation
A principles-based code sets out fundamental principles and a conceptual framework that can be applied to any situation, including ones not foreseen when the code was written. It requires professional judgement. A rules-based code can encourage a 'tick-box' approach and the view that anything not expressly prohibited is acceptable.
More Ethics and public trust MCQs
- Q18An accountant faces a situation that is not specifically addressed anywhere in the ICAEW Code of Ethics. What should the accountant do?
- Q1According to the ICAEW Code of Ethics, what is a distinguishing mark of the accountancy profession?
- Q2In the context of governance, what does 'accountability' mean?
- Q3Which of the following best describes 'transparency' in corporate governance?
- Q4The UK Cadbury Report (1992) gave a widely used definition of corporate governance. What is it?