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

Page: 4 / 14
Total 661 questions

ABC plc has acted in breach of its health and safety obligations and this has led to a number of employees and members of the public being injured.  

 

Which of the following is correct?  

The breach could give rise to:  

i. Civil claims on the part of the employees and members of the public

ii. Enforcement action by the Health and Safety Executive

iii. Criminal sanctions against ABC plc

A.

(i) only

B.

(i) and (ii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii)

Jo is employed as management accountant of a large retailer. Jo has been asked to call a supplier and promise settlement of their account 'next week'. Jo is aware that her employer will definitely not have sufficient funds available to make the payment. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

A.

Integrity

B.

Objectivity

C.

Confidentiality

D.

Professional behavior

You work for a clothing retailer. Which of the following corporate issues is NOT related to ethics or social responsibility?

A.

Sweatshop labor

B.

Whether your clothes appeal to your target markets

C.

Knowingly selling fake versions of this season's high profile designer clothes

D.

The use of natural or organic material in your clothes

The CIMA Code of Ethics relates to:

A.

Professional accountants in public practice and business

B.

Professional accountants in public practice only

C.

Professional accountants in business only

D.

Professional accountants in the third sector only

Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?

 

"A professional accountant should be straightforward and honest in all professional and business relationships"

A.

Confidentiality

B.

Professional behavior

C.

Objectivity

D.

Integrity

Z Ltd intends to participate in a "substantial property transaction" with one of its directors. Which of the following is correct in relation to substantial property transactions? 

(i) The value of the asset must exceed 10% of the company's net assets and be more than £5,000.

(ii) The transaction must be approved by the shareholders.

(iii) The director must disclose his interest in the transaction.

A.

(i) only

B.

(i) and (ii) only

C.

(i) and (iii) only

D.

(i), (ii) and (iii)

Which of the following need to be proved in order for there to be a misrepresentation? Select ALL that apply.

A.

A false representation of the facts.

B.

Made by one party to the other before any contract is made.

C.

An inducement to mislead one party into entering the contract.

D.

Distortion of facts.

E.

More than two parties were involved.

F.

There was at least one witness when the misrepresentation occurred.

Y has an opening at his company for a trainee accountant. His nephew is just about to leave school, and Y receives a call from his sister suggesting that her son should get the job. Y's firm has a strict policy with regards to the employment of family members, especially in finance departments. But for Y, looking after his family is very important, and he is sure he will be an excellent staff member.  Y has an ethical dilemma because there is tension between:

A.

His personal and corporate values

B.

His personal and societal values

C.

His professional and corporate values

D.

His personal and professional values

In relation to the law of misrepresentation, which of the following statements is incorrect?     

A.

In general, silence cannot amount to a misrepresentation.

B.

A misrepresentation is not actionable unless it induced the claimant to contract.  

C.

An honest statement of opinion by a layman cannot amount to a misrepresentation.

D.

A person cannot be liable for misrepresentation, if the truth of the statement could be determined by the misrepresentee making reasonable enquiries.

What is the rule in Foss v Harbottle (1843)?

A.

Where a wrong has been done to the company it is the company which should sue.

B.

Where a wrong has been done to the company it is the directors who should sue.

C.

Where a wrong has been done to the shareholders it is the company which should sue.

D.

Where a wrong has been done to the directors it is the company which should sue.

You have been charged with the task of reviewing the CSR report for your company, GHI. Which of the following aspects of the report represent a lack of compliance with the Global Reporting Initiative G4 Sustainability Reporting Guidelines?

A.

The CSR report reflects GHI's significant economic, environmental and social impact

B.

The CSR report includes both positive and negative aspects of GHI's performance for the year

C.

The CSR report presents information using visual aids that improve the accessibility and understand ability of the information for stakeholders.

D.

The CSR report is compiled and published only when material developments within GHI policies and achievements become available to warrant the expense of producing a new report

Which of the following are situations involving conflicts of interest? Select ALL that apply.

A.

Nina - Receives a large boxful of chocolate delivered to her house from the chocolate factory she is due to audit

B.

Shannon - A department manager at an IT firm who regularly goes out drinking with her team members.

C.

Ben - Regularly works two hours later than he should because his boss constantly gives him large amounts of work to do.

D.

Tyrone - Works standard hours, though is usually unable to do any overtime due to family commitments.

E.

Tina - A personal accountant who actively tries to build a rapport with her clients, though doesn't engage with them outside working hours.

How does CIMA support its members in their continual personal improvement?

A.

Through the CIMA Professional Development Framework

B.

Through the CIMA Code of Ethics

C.

Through the IFAC Code of Ethics

D.

Through the CIMA Public Duty Framework

GHI Ltd has contracted with JKL Ltd. If JKL Ltd acts in breach of a condition, which of the following is correct?

A.

GHI Ltd may terminate the contract and sue for damages.

B.

GHI Ltd may terminate the contract but cannot also claim damages.

C.

The contract between GHI Ltd and JKL Ltd is automatically terminated.

D.

GHI Ltd is entitled to damages only

D is the chief executive of a UK-based mining company which has operations across the world and, in some countries, employs children. Child workers are only permitted to undertake certain tasks that are deemed to be safe and not physically demanding. Endorsed by his board of directors, D argues that it is better for children in poor countries to have the option of fairly paid work than to risk starvation or be forced into prostitution or criminality. A national newspaper publishes the story and gets an unprecedented number of UK voters to sign a petition for government to intervene and stop these practices. This is an example of a tension between:

A.

Personal and professional values

B.

Corporate and societal values

C.

Corporate and professional values

D.

None of the above