You are reading the 2026 curriculum (exams up to November 2026). Sitting in February 2027 or later? Go to the 2027 Ethical and Professional Standards guide.
Standard I(D): Misconduct
Do not engage in professional conduct involving dishonesty, fraud or deceit, or commit any act that reflects adversely on your professional reputation, integrity or competence. Private behavior is generally outside the Standard unless it involves dishonesty or affects your professional work.
Before this: Standard I(C): Misrepresentation
On the exam
- Demonstrate the application of the Code of Ethics and Standards of Professional Conduct to situations involving issues of professional integrity
- Recommend practices and procedures designed to prevent violations of the Code of Ethics and Standards of Professional Conduct
- Identify conduct that conforms to the Code and Standards and conduct that violates the Code and Standards
Demonstrate I(D), recommend procedures and identify compliant conduct. Expect "personal life or professional misconduct?" items. The traps are treating any personal legal trouble as misconduct, and missing that personal dishonesty can be.
How deeply to learn each part
- Know the idea
- Understand it in general. It frames other topics, but you will not calculate with it.
- Use it
- Understand it well enough to solve a question with it. Recognize when it applies.
- Memorize
- Learn it by heart. The exam will not give it to you.
You know this one. The full lesson is folded away. The takeaways, formulas and checkpoint below are your quick refresher, and the checkpoint is a fair test of whether you still do.
You tested strong here. The full lesson is folded away. The takeaways, formulas and checkpoint below are your quick refresher, and the checkpoint is a fair test of whether you still know it.
What does Standard I(D) require?
Misconduct under I(D) has two limbs. You must not engage in professional conduct involving dishonesty, fraud and deceit , and you must not commit any act that reflects adversely on your professional reputation , integrity or competence.
Memorize
- Lying, cheating, stealing and other dishonest acts breach the Standard if they reflect on your professional activities. Dishonesty in your private dealings can too.
- Conduct that is not illegal can still breach it if it damages your trustworthiness or competence, such as abusing alcohol during working hours.
- Doing too little can also breach it: a recommendation made without the due diligence needed to understand an investment, relying on someone else to have done it, betrays the trust clients place in you.
- The Standard is not meant to police personal behavior . CFA Institute is aware that complaints are sometimes used to settle personal or political disputes, and has safeguards against that.
- Covered by I(D) Memorize misconduct
- Dishonesty, fraud or deceit at work, or in personal dealings
- Acts that damage integrity or competence for example working while impaired
-
- Generally not covered Memorize private life
- Peaceful civil disobedience not dishonest
- Personal bankruptcy unless it involved fraud or deceit
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Where are the lines?
| Situation | Verdict |
|---|---|
| Padding an expense report with a family dinner | Violation: dishonesty |
| Regularly coming to client meetings intoxicated | Violation: reflects on competence |
| Arrested at a peaceful protest | Generally not a violation |
| Filing for personal bankruptcy after a medical emergency | Not by itself a violation |
| Lying on a mortgage application | Violation: dishonesty, even though it is private |
Exam tip The decisive question is “is it dishonest, or does it hurt my professional integrity or competence?” A private act that is neither is outside I(D).
Recommended procedures
For firms:
- Code of ethics. Adopt one that every employee signs, making clear that behavior reflecting poorly on the individual, the firm or the industry is not tolerated.
- List of violations. Give staff a list of potential violations and the sanctions, up to dismissal.
- Employee references. Check the references of potential hires to confirm good character and that they are not barred from the industry because of past infractions.
Go deeper Why the Standard targets dishonesty, not private morality
An investment professional’s product is trust: clients hand over money on the strength of their adviser’s honesty. Dishonesty anywhere suggests that trust may be misplaced, so it counts even when it happens outside work. Private views and lifestyle, in contrast, say nothing about whether a client’s money is safe, so the Standard stays out of them. The line also protects members from having the Standard used against them in disputes that have nothing to do with ethics.
Go deeper Links to I(A) and VII(A)
I(A) asks whether you complied with the law that governs your work. I(D) is broader: an act can be perfectly legal and still be misconduct if it is dishonest or damages your standing. Cheating in a CFA exam or breaching its rules is dealt with specifically in VII(A), which protects the integrity of the CFA program.
Memorize this
MemorizeStandard I(D): the test
| Question | If yes |
|---|---|
| Is it dishonest, fraudulent or deceitful, in or out of work? | Misconduct |
| Does it damage your professional integrity, reputation or competence (for example working impaired)? | Misconduct |
| Is it purely private conduct with neither? | Generally not covered |
Memory hook Dishonesty anywhere counts; private life otherwise does not.
Know it cold Firm procedures: a code of ethics, a list of violations and sanctions, and reference checks on new hires.
- Covered by I(D) Memorize misconduct
- Dishonesty, fraud or deceit at work, or in personal dealings
- Acts that damage integrity or competence for example working while impaired
-
- Generally not covered Memorize private life
- Peaceful civil disobedience not dishonest
- Personal bankruptcy unless it involved fraud or deceit
-
How it is asked
-
Padded expenses
An analyst submits receipts from a family birthday as client entertainment. Violation?
Yes, I(D): dishonesty. Trap: "the amount was small".
-
Arrest at a protest
A manager is arrested at a peaceful march and released without charge. Violation?
No. Not dishonest and unrelated to professional work. Trap: "any arrest reflects poorly".
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Preventing misconduct
Which firm procedure best helps prevent misconduct?
Check references and backgrounds before hiring (plus code of ethics and sanctions list). Traps: ban personal investing; social media hours.
Exam traps
- Treating all personal legal trouble as misconduct. An arrest or a bankruptcy is not, by itself.
- Missing that personal dishonesty can violate I(D), even when it happens outside work.
- Excusing small dishonesty because the amount is small.
- Confusing I(D) with I(A). I(A) is about complying with laws; I(D) is about conduct that reflects badly on integrity or competence.
Checkpoint
3 exam-style questions. About 90 seconds each.
1An analyst submits restaurant receipts from a family birthday as client entertainment expenses. Did the analyst violate the Standards?
2A portfolio manager is arrested at a peaceful street march over transport fares on a weekend and released without charge. Did the manager violate Standard I(D)?
3Which firm procedure best helps prevent misconduct?
Key takeaways
- No dishonesty, fraud or deceit; nothing that undermines professional integrity, reputation or competence.
- Private life is outside I(D) unless dishonesty or professional impact is involved.
- Firms prevent misconduct with a code of ethics, a list of sanctions and reference checks.
Questions about this lesson?
Where this comes back
- Standard I(E): Competence Guidance for Standards I–VII
- Standard VII(A): Conduct as Participants in CFA Institute Programs Guidance for Standards I–VII
Questions candidates ask
What is misconduct under the CFA Standards?
Professional conduct involving dishonesty, fraud or deceit, or any act that reflects adversely on your professional reputation, integrity or competence. Lying on an expense claim and working while impaired are typical examples.
Does personal behavior violate Standard I(D)?
Usually not. The Code and Standards focus on professional life. But personal dishonesty, such as fraud, or conduct that damages your professional integrity or competence, can be misconduct even outside work.
Is personal bankruptcy a violation of the CFA Code?
Not by itself. Bankruptcy after a medical emergency does not reflect on integrity. If it involved fraudulent or deceitful business conduct, it could breach I(D).
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