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Fundamentals of Ethics, Corporate Governance and Business Law

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Total Questions : 661

Dive into our fully updated and stable BA4 practice test platform, featuring all the latest CIMA Certificate exam questions added this week. Our preparation tool is more than just a CIMA study aid; it's a strategic advantage.

Our free CIMA Certificate practice questions crafted to reflect the domains and difficulty of the actual exam. The detailed rationales explain the 'why' behind each answer, reinforcing key concepts about BA4. Use this test to pinpoint which areas you need to focus your study on.

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Question # 11

Which TWO of the following are examples of safeguards that may increase the likelihood of identifying or deterring unethical behavior?

Options:

A.  

Effective, well publicized complaints systems operating by the employing organization, the profession or a regulator

B.  

A company policy stating that ethics is discretionary and it is for individuals to decide on their standards of behavior

C.  

An explicitly stated duty to report breaches of ethical requirements

D.  

Leadership of an organization that establishes the expectation that members of an assurance team will act solely in their employer's interest

Discussion 0
Question # 12

F knows from preparing the accounts that the company she works for is going to have to make redundancies due to the recession.  She also knows that, despite the recession, the Managing Director continues to enjoy lavish perks and even uses a private jet. What should she do?

Options:

A.  

Do nothing: Professionally, Mrs F is bound to respect the confidentiality of the information she has received

B.  

Go to the press: Mrs F has a duty to report this in the public interest and the interest of the staff who will be made redundant

C.  

Resign: F cannot carry on working at a company which is so unethical

D.  

Leak the information: that way F's conscience will be clear but the information won't be traced back to her

Discussion 0
Question # 13

Natthapong's toilet won't flush, so he hires a plumber to come over and fix it.

He tells the plumber what the problem is, and the plumber agrees to fix it.

However, once the builder supposedly finishes the job, Natthapong finds that it still won't flush.

Is he able to terminate the contract?

Options:

A.  

Yes - The plumber did not fix the toilet and so the offer cannot be accepted.

B.  

Yes - He is able to terminate the contract at any time, even if the plumber did fix the toilet.

C.  

No - Once he's offered the plumber the job he is unable to terminate the contract.

D.  

No - Even if the plumber hasn't fixed the toilet he has still given up his time and effort and should therefore be paid.

Discussion 0
Question # 14

Charles is one of the three directors of Cee Ltd. The company has recently agreed to purchase Charles' house at its market value of £250,000. Which of the following is correct?

Options:

A.  

The purchase is unlawful as a company cannot contract with one of its own directors.

B.  

Charles need not formally disclose his interest as he is in a minority on the board.

C.  

The purchase must be approved by the shareholders passing an ordinary resolution.

D.  

Charles is not entitled to vote as a shareholder to approve the purchase.

Discussion 0
Question # 15

You have been asked to be involved in negotiations for the potential acquisition of another company. It so happens that your spouse is on the board of directors of that company. This affects the CIMA Code of Ethics fundamental principle of:

Options:

A.  

Objectivity

B.  

Professional competence and due care

C.  

Transparency

D.  

Reliability

Discussion 0
Question # 16

Complying with relevant laws and legislations demonstrates part of which CIMA Code of Ethics fundamental principle?

Options:

A.  

Integrity

B.  

Objectivity

C.  

Responsibility

D.  

Professional behavior

Discussion 0
Question # 17

ABC Ltd has resolved to purchase the business of ST Ltd for £500,000. ABC Ltd is to pay ST Ltd for the business by issuing ordinary £1 shares rather than cash. As the market value of ABC Ltd's shares is £5 per share, ABC Ltd is to issue to ST Ltd 100,000 ordinary £1 shares. Which of the following is incorrect?

Options:

A.  

The issue is lawful as ABC Ltd may issue its shares for a non-cash consideration.

B.  

The issue is lawful because ABC Ltd does not need to first offer the new shares to its existing members.

C.  

The issue is only lawful if the directors have the necessary authority to issue the shares.

D.  

The issue is only lawful if ABC Ltd arranges to have the business valued by the company's auditor.

Discussion 0
Question # 18

Being accountable for one's actions and decisions reflects the personal quality identified by the CIMA Code of Ethics as:

Options:

A.  

Responsibility

B.  

Reliability

C.  

Respect

D.  

Reserve

Discussion 0
Question # 19

In relation to business names which of the following is CORRECT?

(i) Any business may trade under a business name.

(ii) If a business name is used the name of the owner of the business must be disclosed.

(iii) The business name of a private limited company must end with the word “Limited” or “Ltd”.

Options:

A.  

(i) only

B.  

(i) and (ii) only

C.  

(ii) only

D.  

(i) and (iii) only

Discussion 0
Question # 20

Which of the following is a common law remedy?

Options:

A.  

Damages

B.  

An injunction

C.  

Specific performance

D.  

Rescission

Discussion 0
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