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

1. Which of the following is correct in relation to financial assistance for the purchase of its own shares provided by a private company?

A) Financial assistance is a criminal offence on the part of the company
B) In general the existing prohibition has been removed for private companies
C) The directors may be fined if they allow the company to provide financial assistance
D) Financial assistance cannot be used where a majority shareholder is retiring

2. Which of the following is correct?

A) A contract is frustrated if it is impossible to perform at the time that it is made.
B) A contract is frustrated when something happens, after it has been entered into, which renders the contract more difficult to perform.
C) A contract is frustrated when something happens, after it has been entered into, which renders the contract impossible to perform.
D) A contract is frustrated when a party expressly agrees to manufacture and supply goods and then discovers that they will be far more expensive to produce than they thought at the time of the contract.

3. Which of the following terms can be defined as follows?
"...the system by which companies are directed and controlled"

A) Professional behavior
B) Ethics
C) Corporate governance
D) Social responsibility

4. Which of the following statements is correct?
(i) The written statement of particulars of employment is the contract of employment and every employee with one month's service is entitled to receive a copy.
(ii) The written statement of particulars of employment is not the contract of employment.
(iii) The written statement of particulars of employment may be the best evidence of the terms of the contract and every employee with one month's service is entitled to receive a copy.

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

5. In which country are accountants legally required to speak up about certain ethical concerns?

A) China
B) Italy
C) United States of America
D) United Kingdom

Solutions: