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industrialisation 
and the needs that grew from it.
1.3 How do the rules fit together? 
There are three main sources of rules that regulate behaviour of individuals and businesses. These are: 

The 
law 

Non-legal rules and regulations 

Ethics 
The diagram below shows how the three sources of regulation fit together. 
 EXAM FOCUS POINT 
There is an article on the ACCA website entitled “A question of ethics” that is relevant to material in 
this chapter. 
BPP Tutor Toolkit Copy

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PART F: PROFESSIONAL ETHICS IN ACCOUNTING AND BUSINESS 
 
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Point A shows a company's current behaviour. It indicates that it is currently breaking the law. It could 
be treating its employees in an illegal way, such as breaking health and safety laws. 
The company wants to move to point B. This means taking the maximum care of employees that is 
expected by society. To get to this point, the company needs to meet its legal and non-legal obligations 
first. 
The law is the minimum level of behaviour required. Any standard of behaviour below it is considered 
illegal and warrants punishment by society. 
By meeting non-legal regulations (such as the rules of your workplace), you meet a higher level of 
behaviour than just the legal requirements. 
Ethical behaviour is seen as the highest level of behaviour that society expects. Your behaviour goes 
further than just meeting your legal and non-legal obligations.
1.4 Corporate governance concepts
One view of governance is that it is based on a series of underlying concepts. 
1.4.1 Fairness 
The directors' deliberations and also the systems and values that underlie the company must be 
balanced
by taking into account everyone who has a legitimate interest in the company, and respecting 
their rights and views. In many jurisdictions, corporate governance guidelines reinforce legal protection 
for certain groups; for example, minority shareholders.
1.4.2 Openness/transparency