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

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Page: 13 / 14
Total 661 questions

Which of the following statements is correct?

A.

The question as to whether a worker is an employee or an independent contractor is one of law.

B.

The question as to whether a worker is an employee or an independent contractor is one of fact.

C.

The question as to whether a worker is an employee or an independent contractor is one of fact and law.

D.

Whether a worker is an employee or an independent contractor depends entirely on the application of the control test.

Which of the following is not an equitable remedy?

A.

Specific performance.

B.

An injunction.

C.

Damages.

D.

Rescission.

Which of the following options are correct in relation to a contract of employment?

1. The contract must be in writing

2. An employee's duty to act with reasonable care and skill is implied into the contract

3. An employer's duty to provide a inference is implied into the contract

A.

1 and 2 only

B.

2 and 3 only

C.

1 only

D.

2 only

In the UK, which organization that governs the accounting profession has taken the lead with respect to ethical considerations?

A.

The Accounting and Auditing Policy Committee

B.

The Financial Reporting Council

C.

The Financial Standards Accounting Board

D.

The International Accounting Standards Board

Miss K is a newly qualified accountant working in a highly respected local accountancy firm headed by Mr R, who is a pillar of the community.  One night, Miss K is at an out of town bar with friends, when she spots Mr R with Mrs E, a client of the firm. It is obvious they are having a secret affair. Is this an ethical issue?

A.

Yes, Mr R is involved in a potential conflict of interest by having an affair with a client

B.

No, what Mr R and Mrs E do in their own personal time is nobody else's business

C.

Yes, as professional accountants, Miss K and Mr R should not be drinking alcohol

D.

No, Miss K knows nothing about Mr R's private life, and may be mistaken about the affair

What can companies do in order to minimize the likelihood of future legislation?

A.

Maintain effective self regulation

B.

Insist on the highest standards of ethical behavior from their company and its employees

C.

Understand and address what the public expects of companies in terms of ethical behavior and social responsibilities

D.

All of the above

Which of the following type of committee is NOT required by the UK Combined Code?

A.

Investment committee

B.

Audit committee

C.

Remuneration committee

D.

Nominations committee

Exe Ltd includes the following provisions in its Articles of Association. If Exe Ltd acted in breach of these clauses, identify which would not be enforceable against the company as a breach of contract.

A.

Shareholders shall be paid dividends in cash.

B.

All shareholders are entitled to attend and vote at general meetings of the company.

C.

Tom (a shareholder) shall be the company's managing director for life.

D.

Shareholders wishing to sell their shares shall offer them to the company which will purchase them at a fair price as determined by the auditors.

Which of the following is NOT a 'financial stakeholder' of an organization?

A.

Customer

B.

Employee

C.

Government

D.

Competitor

Which of the following statements is incorrect?

A.

A person who signs a contract is deemed to have read it.

B.

A person is assumed to know of a term of which he has been given reasonable notice at or before the time of the contract.

C.

A person seeking to rely upon an onerous clause must show that he has taken sufficient steps to bring the clause to the other party's attention.

D.

A person cannot be bound by an onerous clause.

Zed Bank plc has agreed to allow Exe Ltd an overdraft of £50,000 subject to a fixed and floating charge over almost all of the company's assets. In addition, the directors of Exe Ltd have been required to personally guarantee the overdraft.

 

Which of the following is correct? 

(i) The directors could face bankruptcy if they are called upon to honour the guarantee.

(ii) In this case the directors do not enjoy limited liability as they are liable on the guarantee if the company cannot pay.

(iii) The directors could only be required to honor the guarantee if the company's assets proved insufficient to meet the overdraft.

A.

(i) only

B.

(i) and (ii) only

C.

(iii) only

D.

(i), (ii) and (iii)

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

A.

serve as the investigative arm of the board

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.

assist the external auditor in order to reduce external audit fees

SuperSole eventually decides to outsource its internal audit.

Which of the following are benefits it might experience from doing so?

Select ALL that apply.

A.

Flexibility to increase or reduce in size

B.

Readily available expertise

C.

Lower costs

D.

More independent auditing process

E.

Less time taken

F.

Less risk of confidential information leaking

A professional accountant's social responsibility relates to which TWO of the following?

A.

Acting in the interests of one's employer

B.

Seeking to maximize a company's shareholder return on investment

C.

Playing a role within global, local, professional or other communities

D.

Fulfilling public duty

Self regulation is based upon:

A.

Trust

B.

Compliance

C.

Rules

D.

Professional bodies