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

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Total 661 questions

P contracted to buy a computer from CD (Retailers) Ltd. The contract contained a term excluding liability for any breach of the condition implied by the Sale of Goods Act 1979 that the goods should be of "satisfactory quality".

 

Which of the following is correct?

A.

If this is a consumer sale the clause is void.

B.

If this is a non-consumer sale the clause is valid.

C.

Conditions implied by the Sale of Goods Act 1979 cannot be excluded in any kind of sale.

D.

If this is a consumer sale the clause is void unless it can be shown to be reasonable.

Zed plc wishes to issue £500,000 of shares on terms that the holders will receive a dividend before the other shareholders and they will be bought back by the company in 12 months' time. Which of the following best describes these shares?

A.

Ordinary shares

B.

Redeemable ordinary shares

C.

Preference shares

D.

Redeemable preference shares

Which of the following is incorrect in relation to a company registered after the Companies Act 2006 was fully in force?

A.

The company is to be treated as if it has unlimited objects.

B.

The company may choose to restrict its objects by including provisions to that effect in its Articles of Association.

C.

The company will not be able to place any restrictions on its objects clause.

D.

If the company has restrictions on its objects they may be amended by special resolution.

A company wants to let its employees know that fraud will not be tolerated. It also wants to inform them of the consequences of committing fraud.

Which of the following would best achieve this?

A.

A fraud policy statement

B.

A fraud response plan

C.

A public relations plan

D.

Outlining clear disciplinary procedures

According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards?

A.

The Chairman

B.

The Board

C.

The Managing Director

D.

The shareholders

Which THREE of the following represent the impact of one of the seven principles of public life on accountants?

When awarding contracts accountants should ensure that this is based upon objective measures of comparative merit.

A.

Accountants should avoid any conflicts of interest in their professional conduct

B.

Accountants should ensure that they only restrict information about their clients when the public interest so demands it

C.

Accountants should act solely in the public interest and should therefore not make a profit from their professional advice to clients.

D.

Accountants should promote and support the seven principles in public life through leadership and example.

E.

Accountants should be publicly open about the reasons for their decisions within the companies they work for.

Which of the following is presumed not to be intended to create legal relations? 

A.

A commercial transaction.

B.

An agreement by Exe Ltd to make a gift to Wye Ltd.

C.

A social arrangement.

D.

A contract between father and son.

Which of the following is not a source of English law?

A.

Legislation.

B.

Common law.

C.

European law.

D.

Roman law.

Anne was induced to enter into a contract with Benny by his negligent misrepresentation. Which of the following is correct?

(i) Anne has a remedy against Benny in the tort of negligence.

(ii) Anne has a remedy against Benny under the Misrepresentation Act 1967.

(iii) Anne has a remedy in the tort of deceit. 

A.

(i) only

B.

(i) and (ii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii)

Company B wants to implement ethical control over its staff. It wants to do this by implementing a strong organisational culture.

Which of the following are ways in which the organisation could exercise control in regards to its organisational culture?

Select ALL that apply.

A.

Introduce a statement of values which outlines what the organisation stands for.

B.

Ensure the company's ethical expectations are thoroughly communicated.

C.

Ensure that the company's chairman and CEO lead by example.

D.

Ensure that the company's organisational systems encourage adherence to its ethics.

E.

Ensure that disciplinary action is taken when the company's ethical code is broken.

F.

Only employ directors who have proven strong moral values.

Which of the following is INCORRECT in relation to a claim for wrongful dismissal?

A.

A claim for wrongful dismissal is barred after 3 months.

B.

There is no requirement for a qualifying period of continuous employment.

C.

Damages for wrongful dismissal may be awarded by an employment tribunal.

D.

Evidence of serious misconduct discovered after the employment has ceased is admissible as part of the employers' defence.

Section 12 of the Sale of Goods Act 1979 implies a condition into contracts for the sale of goods that the person selling the goods has the right to sell them. Which of the following is correct?

(i) The contracting parties may agree to exclude Section 12 from their contract

(ii) Section 12 applies to both consumer and non-consumer contracts for the sale of goods.

(iii) A breach of Section 12 entitles the purchaser of the goods to cancel the contract.

A.

(i) only

B.

(i) and (ii) only

C.

(ii) only

D.

(ii) and (iii) only

Which of the following governs all public sector employees?

A.

The Seven Principles of Public Sector Participation

B.

The Seven Principles of Public Enterprise

C.

The Seven Principles of Public Life

D.

The Seven Principles of Public Private Partnership

J is at his company's reception desk when the promotions manager of a new restaurant and bar nearby hands him a number of vouchers for cheap meals and drinks. At the promotion manager's request, J agrees to share out the vouchers among his company's employees. J does not earn much and is tempted to keep the vouchers for himself and his friends. Is this an ethical issue and why?

A.

Yes - promotional offers of this sort are unethical and J should throw away all of the vouchers

B.

Yes - the vouchers were given to J on the understanding that he would distribute them to other employees rather than keep them for himself

C.

No - as long as J gives vouchers to other company employees who earn as little as he does

D.

No - the vouchers were given to J, so he can do what he likes with them

XYZ plc has recently acted in breach of its contract with ABC Ltd. The breach caused ABC Ltd to lose several thousand pounds. The board of ABC Ltd has resolved not to proceed against XYZ plc, as it believes that the time and expense involved would be disadvantageous to the company. A number of ABC Ltd shareholders are dissatisfied with the board's decision.

 

Which of the following is INCORRECT?

A.

Individual shareholders cannot interfere with the board's decision.

B.

If the shareholders pass an ordinary resolution requiring the board to proceed against XYZ plc, the board will be obliged to comply with the resolution.

C.

If the shareholders are dissatisfied with the directors they may vote to remove them from office.

D.

If the directors are removed from office, they may be entitled to damages for breach of their service contracts.