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CIMA BA4 - Fundamentals of Ethics, Corporate Governance and Business Law

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Page: 11 / 14
Total 661 questions

A Ltd is under contract to manufacture machinery for B Ltd for £200,000. Which of the following is a valid excuse for A Ltd failing to complete the contract on time?

A.

A Ltd's factory was flooded.

B.

A Ltd had taken on too many orders and had to give priority to its regular customers.

C.

A Ltd's employees went out on strike.

D.

A number of A Ltd's key workers were absent through illness.

Pascal later heads off to the party where he proceeds to tell everyone about his amazing first day at work and the huge profits his new company are making and how much he's already saved them. "My future is bright"

he tells everyone!

Again, Pascal has breached CIMA's ethical principles.

Which of the following has he breached?

Select ALL that apply.

A.

Confidentiality

B.

Professional competence and due care

C.

Integrity

D.

Professional behaviour

E.

Objectivity

F.

Confidentiality + Integrity

G.

Professional competence and due care + Objectivity

The Auditing Practices Board has an objective of establishing ethical standards in relation to which aspects of the work of external auditors and those providing assurance services?

A.

Transparency, competitiveness and value

B.

Independence, objectivity and competitiveness

C.

Transparency, value and integrity

D.

Independence, objectivity and integrity

Which of the following is INCORRECT in relation to an alteration of a company’s articles of association?

A.

The articles may be amended by the members passing a special resolution.

B.

Any special resolution to alter a company’s articles of association may be passed by the members in a general meeting or by a written resolution.

C.

As long as the resolution to alter the articles is approved by 75% of the members of the company, it may require members to purchase additional shares.

D.

Any special resolution to alter the articles must be passed in good faith in the best interest of all the shareholders.

Who is involved in the third party relationship?

A.

Auditor, shareholders, directors

B.

Auditor, stakeholders, directors

C.

Auditor, shareholders, employees

D.

Auditor, stakeholders, government

The body responsible for reviewing the accountancy profession worldwide is:

A.

The Professional Oversight Board for Accountancy

B.

The International Federation of Accountants

C.

The Financial Reporting Council

D.

The Financial Review Board

Which of the following best describes "independence of mind" as referred to in CIMA's Code of Ethics

A.

It separates a professional accountant from the rest of society

B.

It ensures a professional accountant always tries to avoid any action which discredits the profession.

C.

It permits the expression of a conclusion without being affected by influences that compromise professional judgement

D.

It ensures a professional accountant is straightforward and honest in all professional and business relationships

Which of the following is correct in relation to loans to directors of a public company?

A.

A public company which provides a loan to one of its directors commits a criminal offence unless the loan is approved by the shareholders

B.

If a public company pays the debts of one of its directors on terms that the payment must be repaid by the director, the shareholders must approve the payment

C.

A public company cannot make loans to its directors

D.

A public company is not subject to any restrictions when making a loan to one of its directors

(i) In general a person is assumed to know of a clause of which he has been given reasonable notice at or before the time of the contract.

(ii) In general a person cannot rely on a clause brought to the other party's attention after the contract has been concluded.

(iii) In general a person cannot be bound by a clause written in small print.

 

Choose one of the following.

A.

Only (i) and (ii) are correct.

B.

Only (ii) and (iii) are correct.

C.

Only (i) and (iii) are correct.

D.

(i), (ii) and (iii) are correct.

Which of the following is incorrect?

(i) All contracts must be in writing.

(ii) A contract to sell land must be in writing.

(iii) A contract of employment must be in writing.

A.

(i) only

B.

(i) and (iii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii).

Which of the following types of committee is NOT required by the UK Corporate Governance Code?

A.

Remuneration Committee

B.

Audit Committee

C.

Risk Management Committee

D.

Appointments Committee

John is conducting an external audit on a biscuit factory. He wants to make sure that his audit is comprehensive and thorough. To do this, he aims to make full use of his powers and rights.

Which of the following is John allowed to do?

Select ALL that apply.

A.

Access the company's books and records.

B.

Ask responsible officers to produce relevant documents.

C.

Ask for explanations from officers of the company.

D.

Ask to be notified of any shareholder meetings.

E.

Present arguments at a meeting if there is a proposal to remove the auditors.

F.

Actively investigate fraudulent activity.

G.

Review and report on the performance of management.

Which of the following is not financial assistance for the purchase of a public company's own shares?

A.

A loan by a company outside the ordinary course of business

B.

Allowing the use of a company's assets as security for a loan

C.

The payment of a dividend which has the effect of putting a shareholder in funds and enabling him to purchase the company's shares

D.

Releasing a shareholder from a debt owed to the company

Who is responsible for identifying and managing fraud?

A.

Management

B.

External auditors

C.

Internal auditors

D.

Management and external auditors

E.

Management and internal auditors

F.

External auditors and internal auditors

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

A.

The separation of the roles of Chairman and Managing Director

B.

The appointment of competent accountants in the finance function

C.

The establishment of an audit committee

D.

The reporting to shareholders of risks and internal controls