Professional behaviour, due care, competence, and the duty to report

Reading the rules by number

The five principles are carried by numbered rules. This lesson takes the five the ethics MCQ is most likely to name — 201, 202, 203, 205 and 211 — and gives each a working test you can apply to a scenario. The numbers and titles are from CPA Ontario's published index (read at time of writing, 2026); the text of each rule is the Code's and is not quoted here. What follows is how this course teaches the conduct each rule governs, not the rule's wording.

Professional behaviour — three tests

Rule 201 carries the first principle: conduct that maintains the profession's good reputation. This course judges professional behaviour by three tests: does the act show due care? — does it comply with the law and the standards? — and does it treat colleagues and their work fairly? (For registered students, the nearest public wording on the third test is the Student Code's rule 301, professional courtesy: treat others with the courtesy you would expect.)

The third test is the one that trips people, because it is not "never criticise". Contrast two juniors who have each found errors in a predecessor's work.

• The first tells the client: "The previous accountant clearly didn't know what they were doing." That is disparagement without cause — a sweeping judgement of a colleague's competence, to a client, with no specifics. It fails the third test whatever the errors were.
• The second writes a private note to the engagement partner: "Three misstatements in the prior-year working papers: the accrual at note 4 is double-counted ($6,200); the lease schedule uses the wrong rate (5 %, contract says 7 %); the inventory count sheet is unsigned. Cause: the prior-year file was prepared before the lease was amended." Specific, documented, private, with cause. That is not disparagement; it is due care.

Reporting a colleague's genuine breach through the proper channel is likewise not disparagement — it is required (see rule 211 below). Disagreement is not disparagement either. The test is sweeping and without cause, not critical.

Due care and competence

Due care (rule 202, with integrity) is the care a competent professional would take in the circumstances. It is not your best effort — a beginner's best effort can be well below the standard — and it is not "never make an error"; it is the standard of process a competent person applies. A junior is asked to initial a fixed-asset schedule they did not prepare and have not checked, because the senior is at another client. Initialling it is a failure of due care: the initial asserts a check that did not happen. The professional response is to check it, or to say in writing that it has not been checked.

Professional competence (rule 203) is the obligation to accept only work you can do to the required standard, and to keep current. A junior is offered a crypto-asset mining client's file, the firm's first. Taking it with no experience and no plan is a competence breach — before a single number is wrong. Taking it with a named contractor who has the experience, a supervision plan and time to acquire the knowledge is how a competent firm expands into new work. The breach is in the acceptance, not in the outcome.

Misleading documents, and the duty to report

Rule 205 is the Code's rule on false or misleading documents. The test this course applies: would a reader be misled by a document I am associated with? Association is wider than authorship. A schedule you know overstates receivables goes out with your initials in the file. You did not write it; you did nothing; you are associated with a misleading document. "I didn't write it" is not a defence, and it is not a confidentiality matter either — it is the exact conduct the rule exists for.

Rule 211 carries the duty to report: a member who learns of another member's serious breach of the Code has an obligation to report it to the professional body. Not "if a client complains"; not "confront them publicly"; report, through the channel. This is the rule that makes the code enforceable in practice — a profession whose members would not report each other could not credibly self-regulate.

Five to rule on

1. A senior tells a prospective client the competing firm "cuts corners on everything". (Professional behaviour — disparagement without cause.)
2. A junior signs a bank reconciliation as reviewed after checking three of forty items. (Due care.)
3. A sole practitioner accepts a transfer-pricing engagement having never done one, alone. (Professional competence.)
4. A staff member notices the draft statements omit a lawsuit the client mentioned, and says nothing. (Association with a misleading document — 205.)
5. A member learns a fellow member has been forging client signatures on filings. (Duty to report — 211.)