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

1. Which of the following governs all public sector employees?

A) The Seven Principles of Public Private Partnership
B) The Seven Principles of Public Sector Participation
C) The Seven Principles of Public Life
D) The Seven Principles of Public Enterprise

2. A professional accountant is NOT accountable to:

A) The public
B) His or her company's competitors
C) His or her employer
D) His or her clients

3. In which of the following situations has a contract of employment arisen?

A) A verbal offer of work is made to S for the possibility of duties at a specified pay rate but the employer makes it explicit that, as the need for the services is not yet certain S is free to work elsewhere
B) A verbal offer of work is made to Q at a given pay rate for specified services. The offer is not accepted by Q either verbally or in writing and Q does not turn up for work
C) A written offer of work is made to R which specifies the services required but omits the pay rate for the job. This is not accepted by R either in writing or verbally and R does not turn up for work
D) A verbal offer of work is made to P at a given pay rate per hour for specified services The offer is not accepted by P either verbally or in writing but P turns up for work and performs the duties identified in the offer.

4. Which of the following is entitled to initiate court action on behalf of a company?
(i) The board.
(ii) The majority shareholders.
(iii) All the shareholders.

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

5. Which of the following is correct in relation to corporate governance in the UK?
(i) If a listed public company in the UK fails to comply with the UK Corporate Governance Code, the company and the board may be prosecuted by the Financial Services Authority.
(ii) The duties of directors are codified in the Companies Act 2006 and breaches are enforceable by the company.
(iii) The ability of the majority of shareholders to dismiss a director for any reason whatsoever is the main sanction provided by the UK Corporate Governance Code.

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

Solutions: