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CIMA BA4 Exam Syllabus Topics:

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

1. Which of the following groups is a financial as opposed to a non-financial stakeholder of a company?

A) Local charities
B) Competitors
C) Employees
D) Journalists

2. Why are the principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior "fundamental"?

A) Because they are the foundations of corporate responsibility
B) Because they are the foundations of reasoning and professional practice
C) Because they are the foundations of human rights
D) Because they are the foundations of management accounting

3. Wye has borrowed £10,000 from Exe and the loan has now become repayable in full. Exe has received a cheque from Wye for £9,000 stated to be "in full and final settlement of the loan." What is the position if Exe cashes the cheque?
(i) Exe will have accepted £9,000 in full and final settlement and will not be able to claim the other
£1,000 from Wye.
(ii) Exe is legally entitled to cash the cheque and pursue Wye for the balance of £1,000.
(iii) Exe will have accepted £9,000, but at law payment of less than the amount due cannot satisfy the full debt.

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

4. Tom is a director of XYZ Ltd. The company is considering purchasing Tom's business for £200,000. Which of the following is incorrect?

A) The shareholders may approve the arrangement by passing an ordinary resolution.
B) Tom must formally disclose his interest in the contract to the board.
C) The purchase consideration may be in the form of cash or shares.
D) Tom cannot contract with XYZ Ltd as he would be placing himself in a conflict of interest and duty situation.

5. Independence of mind allows a professional accountant to:

A) Exercise professional skepticism
B) Act with integrity
C) All of the above
D) Exercise objectivity

Solutions: