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

1. Which of the following is INCORRECT?

A) A company secretary is an officer and not an employee of the company
B) A company secretary may be dismissed by the board
C) A company secretary of a public company must be appropriately qualified
D) A person may be appointed company secretary for life

2. Which of the following describes a principles-based approach to ethical standards in an organisation?
The objective behind the approach is to:

A) detect ethical non-compliance It focuses on the development of discipline and obedience and its standards are explicit
B) prevent ethical non-compliance It focuses on the development and application of individual judgment and standards are implicit
C) detect ethical non-compliance It motivates through fear and its standards are implicit
D) prevent ethical non-compliance It motivates through values and its standards are explicit

3. Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?
"A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession"

A) Professional behavior
B) Objectivity
C) Professional competence and due care
D) Integrity

4. Which of the following entitles the innocent party to cancel the contract?
(i) A breach of a warranty.
(ii) A breach of a condition.
(iii) An express term authorizing termination of the contract.

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

5. X Ltd has entered into a number of contracts with Y Ltd. In which of the following situations could the directors be held personally liable for the debts contracted with Y Ltd?
(i) X Ltd has continued to trade at a time when insolvency appeared inevitable (ii) X Ltd has become insolvent and is unable to pay its debts to Y Ltd (iii) X Ltd has contracted for a purpose not specified in its articles of association

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

Solutions: