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Free ICAEW ACA Certificate Level Sustainability and Ethics Practice Questions

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Sample Practice Questions

Try these 10 sample questions from the ICAEW ACA Certificate Level Sustainability and Ethics practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

  1. 1What is the central purpose of the UN Sustainable Development Goals?

    1. A.To supply a shared global agenda for sustainable developmentCorrect answer: A
    2. B.To prescribe uniform corporate accounting entries worldwide
    3. C.To rank nations solely by their annual economic growth
    4. D.To replace national law with one international corporate code

    Explanation: The Agenda calls itself "a plan of action for people, planet and prosperity". It coordinates development across these concerns. It is neither a bookkeeping standard, a GDP-only ranking nor a single corporate law.

    Reference: United Nations 2030 Agenda for Sustainable Development — Preamble

  2. 2Which set identifies the three dimensions of sustainable development used in the UN 2030 Agenda?

    1. A.Environmental, technological and legal
    2. B.Financial, operational and reputational
    3. C.Economic, social and environmentalCorrect answer: C
    4. D.Political, demographic and technological

    Explanation: The Agenda names "the economic, social and environmental" dimensions. The alternatives mix PESTEL factors or business risk categories with the sustainability pillars.

    Reference: United Nations 2030 Agenda for Sustainable Development — Preamble

  3. 3The UK Government's February 2022 climate-disclosure document is labelled non-binding guidance. What creates the mandatory reporting obligations that it explains?

    1. A.The descriptive wording of the guidance by itself
    2. B.The statutory regulations identified in the guidanceCorrect answer: B
    3. C.A company's decision to obtain a CDP disclosure score
    4. D.The original voluntary TCFD recommendations alone

    Explanation: The introduction describes requirements "under the Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations". The guidance explains those regulations; the guidance label, a disclosure score and voluntary recommendations are not substitutes for the legal instrument.

    Reference: UK Government: Mandatory climate-related financial disclosures — Section 1 — A. Introduction

  4. 4A board assigns sustainability risk management to an operational committee. What information would demonstrate clear governance responsibility?

    1. A.The committee’s budget, without identifying oversight responsibilities
    2. B.A list of sustainability initiatives, without explaining who oversees risks
    3. C.Who oversees the risks and how the board considers themCorrect answer: C
    4. D.The board’s risk appetite, without identifying responsibility for oversight

    Explanation: The guidance asks which "person or committee has the responsibility" and how the board considers climate risks. Budget, initiatives and risk appetite can be relevant information, but without oversight responsibility they do not answer this governance question.

    Reference: UK Government: Mandatory climate-related financial disclosures — Pages 10–11; Section 1E Q4(a)

  5. 5Why can comparable climate-related financial disclosures help investors?

    1. A.They remove the need to consider investment risk
    2. B.They help investors assess exposure to climate-related risksCorrect answer: B
    3. C.They ensure every investment has the same expected return
    4. D.They certify that the reporting entity is carbon neutral

    Explanation: The guidance states that disclosures "can help support investment decisions". Comparable information helps assess exposure; it does not remove risk, equalise returns or certify neutrality.

    Reference: UK Government: Mandatory climate-related financial disclosures — Section 1 — B. Overview, benefits of disclosure

  6. 6Which statement best describes the purpose of personal ethical reflection?

    1. A.Accepting every strongly held feeling as a reliable moral conclusion
    2. B.Examining one’s moral beliefs and conduct against reasoned standardsCorrect answer: B
    3. C.Using the most popular opinion as conclusive proof of right conduct
    4. D.Treating personal advantage as the measure of every ethical decision

    Explanation: The Center describes "studying our own moral beliefs and our moral conduct". Reflection tests beliefs against well-founded reasons, rather than equating ethics with feelings, popularity or personal gain.

    Reference: Markkula Center for Applied Ethics: What is Ethics? — Concluding paragraph

  7. 7According to the Code, what underpins confidence in the accountancy profession?

    1. A.The commercial outcomes achieved for the paying client
    2. B.The skills and values applied to professional activitiesCorrect answer: B
    3. C.The level of fees charged for professional services
    4. D.The length of time that an accountant has held a senior title

    Explanation: The Code refers to "the skills and values that accountants bring" to their activities. Confidence rests on substantive competence and values; favourable commercial outcomes, fee levels or seniority do not by themselves establish that professional foundation.

    Reference: ICAEW Code of Ethics 2025 — 100.2

  8. 8In the ICAEW Code of Ethics, what is the distinction between paragraphs marked R and paragraphs marked A?

    1. A.R paragraphs apply only to regulators; A paragraphs apply to accountants
    2. B.R paragraphs impose obligations; A paragraphs provide material for applying themCorrect answer: B
    3. C.R paragraphs are optional recommendations; A paragraphs are mandatory audit rules
    4. D.R paragraphs apply only to reporting; A paragraphs apply only to assurance

    Explanation: The Code says requirements marked R "impose obligations", while A material provides context and guidance needed for proper application. The letters distinguish function, not regulator, activity or optional compliance.

    Reference: ICAEW Code of Ethics 2025 — 100.5 A1–A2

  9. 9An accountant must evaluate a model whose key judgements they previously developed and will rely on in the current work. Which threat is directly created?

    1. A.Advocacy threat
    2. B.Familiarity threat
    3. C.Self-review threatCorrect answer: C
    4. D.Intimidation threat

    Explanation: A self-review threat is "the threat that a professional accountant will not appropriately evaluate the results of a previous judgement made". Reliance on one’s own prior modelling judgement creates it; promotion, personal closeness and pressure are different threat mechanisms.

    Reference: ICAEW Code of Ethics 2025 — 120.6 A3(b)

  10. 10Under the Government Data and AI Ethics Framework, which assessment directly addresses fairness in a public-sector data project?

    1. A.Whether the system’s prediction errors are small on average
    2. B.Whether its predictions and impacts differ unfairly between affected groupsCorrect answer: B
    3. C.Whether all the records have consistent electronic file formats
    4. D.Whether the system delivers the same processing time for each case

    Explanation: The fairness principle calls for assessing "data representativeness, bias, and the different potential impacts". An overall accuracy measure, uniform file format or processing speed does not establish fairness between affected groups.

    Reference: Government Digital Service: Data and AI Ethics Framework — Principles: Fairness

Exam Review

About ICAEW ACA Certificate Level Sustainability and Ethics

ICAEW ACA Certificate Level Sustainability and Ethics · GB

Key exam facts

Provider
ICAEW (Institute of Chartered Accountants in England and Wales) owns the ACA examination; Pearson VUE provides test-centre and OnVUE remote delivery.
Format
Computer-based examination at a test centre or via OnVUE remote invigilation, using multiple-choice, multi-part multiple-choice and multiple-response questions.
Exam questions
Total questions: 50.
Time limit
90 minutes of examination time. The optional five-minute post-exam survey added to appointments after 1 March 2026 is separate and does not reduce the exam time; approved access arrangements may vary the individual exam length.
Passing score
55% pass mark.
Exam fee
GBP £103 per Certificate Level examination entry in 2027, payable when applying for each exam. Student registration, tuition and learning materials are separate charges.

Topics covered

  • Concepts and significance of sustainability (10%)

    • Define sustainability and understand the significance of the United Nations Sustainable Development Goals (UN SDGs)
    • Understand key sustainability concepts, including the Anthropocene, planetary boundaries, different forms of capital, economic and social concepts eg, doughnut economics, circular economy, and the difference between approaches to economic growth and degrowth
    • Identify sustainability challenges and trends that have an effect on a global scale, including but not limited to climate change, pollution, waste and species decline; population changes, urbanisation and migration; economic inequality
    • Recognise the key stakeholders in sustainability

  • Pillars of sustainability (10%)

    • Identify the three pillars of sustainability
    • Understand challenges to environmental sustainability and the impact of actions and inactions on the environment
    • Understand challenges to social sustainability and the impact of actions and inactions on society
    • Understand challenges to economic sustainability and the impact of actions and inactions on the economy
    • Understand the interconnection between the three pillars of sustainability

  • Regulation on sustainability (6%)

    • Identify the roles of regulation, policy and guidelines in sustainability and the advantages and disadvantages of each approach
    • Identify the role of international organisations in driving sustainability changes and key international sustainability agreements
    • Identify the role and importance of governmental organisations in driving sustainability changes and key sustainability regulation
    • Identify the roles and importance of non-governmental and other organisations in driving sustainability changes and their impact
    • Understand the trend from less prescriptive sustainability guidance towards more codified regulation
    • Recognise areas where sustainability goals have been codified, eg CSRD

  • Sustainability in business (14%)

    • Identify the role and responsibilities of businesses in driving sustainability changes and influences on sustainable strategy and operations
    • Identify barriers to progress in corporate sustainability
    • Understand how business activities lead to sustainability-related impacts, dependencies, risks and opportunities, and how these affect enterprise and social value
    • Understand the characteristics of sustainable finance for business
    • Understand the importance for businesses of assessing their environmental impact using a life cycle assessment (LCA) approach
    • Understand how corporate sustainability is measured against environmental, social and governance (ESG) factors, including the measurement of GHG (greenhouse gas) emissions
    • Understand the meaning and consequences of communicating about sustainability, including the importance of transparency eg, avoiding greenwashing
    • Understand the importance of emerging sustainability challenges

  • The role of the professional accountant in sustainability (10%)

    • Identify the role of corporate sustainability reporting and the key sustainability reporting requirements for business
    • Recognise key sustainability regulations and policies applicable to the work of the professional accountant, including corporate reporting
    • Recognise the role of the professional accountant in sustainability assurance
    • Understand the role of accountancy bodies and professional accountants in driving sustainability
    • Understand the importance of a sustainable approach within a professional accountant’s own workplace and practices, and the benefits of economic sustainability for stakeholders

  • Concept of ethics and its significance for the accountancy profession (8%)

    • Define personal, business and professional ethics and recognise the role of ethics in society
    • Understand key ethical concepts including objectivism, relativism, teleological (consequential impact) ethics, deontological (rule-defined, non-consequential) ethics and utilitarianism
    • Understand the inter-relationships between ethics and law, and ethics and sustainability
    • Recognise the importance of stakeholder interests in ethical decision making
    • Understand why it is important for organisations to promote and maintain an ethical culture and how this can be achieved
    • Understand the role and importance of ethics within the accounting profession and in the concept of social responsibility
    • Understand the importance of the relevant ethical requirements to all professional activities undertaken by professional accountants, including sustainability engagements

  • Ethics and public trust (14%)

    • Understand public interest and public trust and why they are important, and recognise how principles of professional behaviour protect the public and fellow professionals
    • Define accountability, transparency and governance and understand why they are important
    • Understand the role of ethics in relation to business and good governance
    • Understand professional scepticism and professional judgement and why they are important
    • Understand the need for recognising and reducing bias in solving problems, informing judgements, reaching informed conclusions and communicating with stakeholders
    • Recognise the consequences of unethical behaviour for the individual, the organisation, the accounting profession and the public
    • Understand ICAEW’s regulatory role in the maintenance of public trust and recognise the measures ICAEW has in place to support this
    • Recognise the differences between a rules-based code and a principles-based code
    • Recognise the role and application of relevant ethical codes and understand the relationship between the IESBA Code of Ethics, the FRC Ethical Standard and the ICAEW Code of Ethics

  • The fundamental ethical principles (14%)

    • Understand the structure of the ICAEW Code of Ethics
    • Understand the fundamental principles underlying the ICAEW Code of Ethics: integrity, objectivity, professional competence and due care, confidentiality and professional behaviour
    • Identify the risks arising from a breach of confidentiality or accidental disclosure of information
    • Identify situations when confidential information may be disclosed
    • Recognise the responsibility of professional accountants to detect and to help prevent criminal activities eg money laundering, tax evasion, bribery, fraud and modern slavery
    • Recognise the importance of independence for the professional accountant
    • Identify situations when a conflict of interest may arise and recognise the ethical issues that this can create

  • Threats and safeguards (6%)

    • Identify situations that may threaten compliance with the fundamental principles
    • Identify how to apply the conceptual framework from ICAEW’s Code of Ethics to identify and evaluate threats to compliance with the fundamental principles
    • Recognise safeguards that may be used to eliminate a threat to a fundamental principle, or reduce it to an acceptable level
    • Recognise the ways in which threats relevant to accountants working in business may differ from threats relevant to accountants working in practice
    • Recognise situations when there may be pressure to breach ethical principles
    • Understand the concept of whistleblowing or speaking out and specify the potential impact on an individual

  • Data ethics and the impact of technology (8%)

    • Specify the principles of data ethics
    • Understand why it is important for a professional accountant to challenge the selection, capture, analysis and use of data and information, including data bias
    • Recognise the need for a professional accountant to maintain an enquiring mind when collecting and assessing data and information from a variety of sources and perspectives
    • Understand the regulations protecting personal data and commercially sensitive information
    • Identify the ethical issues, opportunities and threats relating to the development, use and impact of technology, including artificial intelligence (AI)

How to prepare

Work through the topics, read the explanation after each answer, and revisit the areas where you miss questions. Use the official outline and reference materials below to guide your study.

These independent practice questions are not actual exam items and do not guarantee a passing result.

Frequently asked questions

What is the exam format?

Computer-based examination at a test centre or via OnVUE remote invigilation, using multiple-choice, multi-part multiple-choice and multiple-response questions.

How many questions are on the exam?

Total questions: 50.

How long is the exam?

90 minutes of examination time. The optional five-minute post-exam survey added to appointments after 1 March 2026 is separate and does not reduce the exam time; approved access arrangements may vary the individual exam length.

What is the passing score?

55% pass mark.

How much does the exam cost?

GBP £103 per Certificate Level examination entry in 2027, payable when applying for each exam. Student registration, tuition and learning materials are separate charges.

Official sources and references

Confirm current exam arrangements with the exam provider.