Which principle ensures that firms act with care and diligence?

The principle of "Skill, care and diligence" is essential because it establishes the standard that firms must uphold in their operations. This principle mandates that firms should employ the necessary skills and exercise due care when providing their services or conducting their business activities. It requires a commitment to maintaining professional competence and meeting the expected standards of performance, thus ensuring that decisions are made thoughtfully and responsibly.

By adhering to this principle, firms are motivated to ensure that their employees are well-trained and that they continually seek to improve their knowledge and expertise. This focus on skill and diligence helps to build trust with clients and stakeholders, as the firm demonstrates a commitment to high standards in its practices.

In this context, the other options address various important aspects of business conduct but do not specifically encapsulate the requirement for acting with care and diligence in the way that this principle does. For instance, integrity reflects honesty and ethics in conduct, while management and control relate to the governance framework within the organization. Financial prudence emphasizes responsible financial management. However, none of these encompasses the comprehensive obligation to act with the requisite level of skill, care, and diligence in all aspects of a firm’s operations.