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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. In which of the following countries are employees represented at board level?
i. Germany.
ii. United States of America
iii. France.

A) (i) and (iii) only
B) (i) only
C) (i) and (ii) only
D) (iii) only

2. If a business trades as "Exe and Co (Office Furniture)" which of the following is CORRECT?
(i) The business could be owned by a partnership
(ii) The business could be owned by a sole trader
(iii) The business could be owned by a private company limited by shares

A) (i), (ii) and (iii)
B) (i) only
C) (i) and (ii) only
D) (iii) only

3. Jo is employed as management accountant of a large retailer. Jo has been asked to dismiss one of her colleagues for 'misconduct', but she is aware that the colleague has done nothing wrong and that her employer is trying to avoid paying any redundancy settlement. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

A) Confidentiality
B) Integrity
C) Objectivity
D) Professional behavior

4. R, S and T are the only shareholders in RST Ltd each holding 5,000 ordinary £1 shares. R is the only director of the company. The articles of association of RST contain the following provisions:
1. R is to be a director of RST Ltd for life.
2. In the event of any resolution to dismiss R by ordinary resolution his votes shall count three times.
Which of the following is CORRECT?
(i) Provision 1 is void as a director cannot be appointed for a period exceeding 3 years.
(ii) Provision 2 is valid and R may outvote any proposed resolution to dismiss him.
(iii) Provisions 1 and 2 are both unenforceable by R as they are not ordinary membership rights.

A) (i) and (iii) only
B) (i) only
C) (ii) only
D) (iii) only

5. When preparing financial statements, you are extremely careful not to omit relevant information, mislead readers or misstate facts. This demonstrates the CIMA Code of Ethics fundamental principle of:

A) Confidentiality
B) Integrity
C) Objectivity
D) Professional behavior

Solutions: