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

1. The chief executive of a transnational corporation states on her curriculum vitae that she has an MBA which she does not in fact have. Is this an ethical issue and why?

A) Yes - lying is an ethical issue and casts doubt on the integrity of the individual
B) No - everyone lies on their CV
C) Maybe - depending on whether the lack of an MBA would mean that she is not competent to do her job
D) Maybe - depending on whether anyone finds out or not

2. Which of the following will NOT as a general rule amount to consideration?

A) A promise to pay the amount due at an early date.
B) A promise to do an act in return for payment.
C) A promise to carry out an existing contract.
D) A promise to do more than was originally agreed.

3. Which of the following is INCORRECT in relation to the company secretary?

A) The company secretary is the chief administrative officer of the company
B) All companies must have a company secretary
C) The company secretary of a public company must be appropriately qualified
D) The company secretary may bind the company in contract if she/he has actual or ostensible authority

4. Which of the following are recommended by the UK Corporate Governance Code?
(i) The roles of Chairman and Managing Director should be separated
(ii) A senior independent director should be identified and available as a contact for shareholders (iii) At least one half of the board as a whole should be made up of independent non-executive directors

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

5. Which of the following statements is correct in relation to private and public companies limited by shares?

A) A public company cannot commence trading until it has satisfied minimum share capital requirements
B) A private and public company are required to hold an AGM
C) A public company is required to have at least one director
D) A private company must have a qualified company secretary

Solutions: