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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 are TWO reasons why new legislation might be introduced in response to corporate scandals?

A) To encourage companies to make their own decisions about ethical matters
B) To prevent this type of unethical behavior by making it illegal
C) To enforce minimum standards of behavior
D) To punish individuals for adhering to codes of ethics

2. Zed plc contracted to build an apartment block for Exe Ltd. Which of the following would provide Zed with a valid excuse not to proceed with the contract?
(i) A key employee who was to manage the project has resigned.
(ii) The price of the materials to be used by Zed plc have increased to such an extent that the building can only be completed at a loss to Zed plc.
(iii) Planning permission has been refused.

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

3. Which of the following do CIMA members NOT have a specific duty to do?

A) Observe the highest standards of conduct and integrity
B) Refrain from any conduct which might discredit the profession
C) Uphold the good standing and reputation of the profession
D) Uphold the good standing and reputation of their employer

4. J and K are the only shareholders in JK Ltd, each holding 500 fully paid ordinary £1 shares. J is the company's only director and K the company secretary. The company has been placed in creditors' voluntary liquidation on the grounds that it is unable to pay its debts.
Which of the following is correct?

A) J and K are not obliged to contribute anything further towards the debts of the company.
B) As they each hold 50% of the shares, J and K are each obliged to pay half of the company's debts.
C) JK Ltd is not liable for its debts as it is a limited company.
D) J is liable for the company's debts as he is the sole director of the company which is obliged by law to have at least two directors.

5. Which of the following statements is INCORRECT?
i. A contract is a voluntary agreement whereas obligations in the tort of negligence are imposed by the state.
ii. Damages are only available for breach of contract and breach of the tort of negligence if damage, injury or loss has been suffered by the claimant.
iii. A contract breaker is liable whether or not he is at fault whereas to be liable in the tort of negligence the defendant must have been at fault.

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

Solutions: