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

1. Wye Ltd has ordered goods from ABC plc and the directors of Wye Ltd have guaranteed that Wye Ltd will pay the agreed sum within one month of the delivery of the goods.
Which of the following is correct?
(i) The contract is between Wye Ltd and ABC plc and the directors cannot be forced to pay the amount due in any circumstances.
(ii) A contract of guarantee is only enforceable if it is evidenced in writing.
(iii) The directors of Wye Ltd can be forced to honor the guarantee in the event of Wye Ltd not paying the amount due.

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

2. The primary role of internal audit within an organisation is to:

A) assist the external auditor in order to reduce external audit fees
B) serve as an independent, objective assurance and consulting activity that adds value to operations
C) carry out assignments to assist in the attainment of more efficient operations
D) serve as the investigative arm of the board

3. B is a director and shareholder in Cee Ltd. Which ONE of the following is INCORRECT?

A) The company must be given 28 days notice of any proposed resolution to dismiss B.
B) B cannot vote as a shareholder in any meeting called to dismiss him as a director.
C) B is entitled to speak at the meeting called to consider the proposal to dismiss him.
D) B may be dismissed at any time by an ordinary resolution of the shareholders.

4. Your boss knows that you will always strive to deliver a project on time and on budget. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

A) Timeliness
B) Respect
C) Courtesy
D) Reliability

5. Karl has been offered a compensatory award after a court ruled that he had been unfairly dismissed by his former employer.
He is 45 and had been working for the company for 18 years.
For his basic reward, how many weeks' pay should he receive?

A) 18
B) 9
C) 45
D) 27
E) 36

Solutions: