Summer Sale Limited Time 65% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code: ecus65

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

CIMA BA4 Premium Access     Download Demo    
Page: 3 / 14
Total 661 questions

Which of the following correctly describes the circumstances in which directors may be held liable to contribute to the assets of insolvent companies in respect of "wrongful trading"?

A.

Where the directors have the intention of defrauding creditors.

B.

Where directors knew or ought to have known that insolvency was inevitable.

C.

Whenever a company becomes insolvent.

D.

Whenever a company's liabilities exceed its assets.

An auditor would trace copies of sales invoices lo shipping documents in order to check for which of the following errors?

A.

Goods which have been invoiced have not been sent to customers

B.

Goods which were sent to customers have not been recorded in the individual customer's ledger account

C.

Goods which have been invoiced have not been recorded in the sales ledger.

D.

Goods sent to customers have not been invoiced

On 1st May Wye Ltd wrote to Zed Ltd offering to sell a machine for £20,000, and allowing Zed Ltd 7 days to consider the offer.

 

Which of the following statements is incorrect?

A.

Wye Ltd can withdraw the offer at any time before Zed Ltd has accepted.

B.

Wye Ltd is contractually obliged to keep the offer to Zed Ltd open for 7 days.

C.

If Zed Ltd accepts the offer by post on 4th of May, then there is a contract from 4th May.

D.

If Wye Ltd posts a revocation of the offer on 2nd of May which is received by Zed Ltd on 3rd May then the offer is withdrawn with effect from the 3rd May.

Which of the following is incorrect?

(i) Legal title cannot pass on a contract induced by misrepresentation.

(ii) Misrepresentation renders a contract voidable.

(iii) A victim of negligent misrepresentation may seek rescission and damages. 

A.

(i) only

B.

(ii) only

C.

(i) and (iii) only

D.

(ii) and (iii) only

Which of the following is the superior source of law?

A.

A decision by the Supreme Court.

B.

A provision in an Act of Parliament

C.

A Regulation issued by the European Council of Ministers.

D.

A Statutory Instrument.

How many fundamental principles are identified by the CIMA Code of Ethics?

A.

Three

B.

Four

C.

Five

D.

Six

Faegan and Fabian run their own business selling expensive shoes. The business is a general partnership, so both Faegan and Fabian have equal authority within it.

Recently, the business has grown very large. Because of this, one of their friends suggests getting that they have their accounts audited.

Are they legally obliged to do this?

A.

No - General partnerships do not have to publish or audit their accounts.

B.

Yes - General partnerships are legally required to have their accounts audited once they reach a certain size.

C.

Yes - All businesses are required to have their accounts audited.

D.

No - No business is required to have their accounts audited.

What is an essential quality for a professional accountant?

A.

Ethical acumen

B.

Emotional intelligence

C.

Emotional sensitivity

D.

Listening skills

Which of the following countries does not have a written constitution?

A.

The United Kingdom

B.

Poland

C.

Germany

D.

Italy

Which of the following is correct?

i. A company intending to issue new shares for cash must first offer them to the existing shareholders.

ii. A company may dispense with the requirement to offer new shares to existing shareholders by passing a special resolution.

iii. A company issuing shares for a non-cash consideration is not required to offer the shares to the existing members first.

A.

(i) only

B.

(ii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii)

Which of the following does NOT describe the responsibilities of the audit committee?

A.

The review of the internal audit programme and significant findings of the auditors. The review of the company's systems of internal control. The review of the company's system to facilitate whistle blowing

B.

The review of the company's financial statements and any interim reports produced. The review of the structure, size and composition of the board. The review of the company's internal control and risk management system

C.

The discussion with auditors on any significant matters that arose during the audit. The recommendations on the appointment and removal of auditors. The setting of the audit fee in discussion with the auditors.

D.

The review of the company's financial statements and any interim reports produced. The review of the company's systems of internal controls. The review of the audit report and any management letter provided by the external auditor

Which TWO of the following are NOT directly relevant to a system of professional ethics?

A.

Religious morality

B.

Political morality

C.

Career development

D.

Personal friendships

E.

Family commitments

X Ltd has entered into a number of contracts with Y Ltd. In which of the following situations could the directors be held personally liable for the debts contracted with Y Ltd?

(i) X Ltd has continued to trade at a time when insolvency appeared inevitable

(ii) X Ltd has become insolvent and is unable to pay its debts to Y Ltd

(iii) X Ltd has contracted for a purpose not specified in its articles of association

A.

(i) only

B.

(i) and (ii) only

C.

(ii) only

D.

(iii) only

Which of the following destroys the original offer and puts another in its place?

A.

A request for further information.

B.

A counter offer.

C.

An acceptance.

D.

A revocation.

Which of the following sources of law is not binding upon the Supreme Court?

A.

A Statutory Instrument.

B.

A European Council regulation.

C.

A previous decision of the House of Lords.

D.

A provision in an Act of Parliament.