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

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Total 661 questions

Which of the following is correct in relation to the memorandum of association when registering a company limited by shares?

A.

The information in the objects clause in the memorandum of a company registered before the Companies Act 2006, is treated as part of the company's articles of association

B.

The name of the company must still be specified in the memorandum

C.

The memorandum must state the company's authorised share capital

D.

The country in which the company is to have its registered office must be specified in the memorandum

Although no-one has reason to suspect, you have taken a violent dislike to a particular assurance client. This could severely affect your independence:

A.

Of belief

B.

In appearance

C.

Of mind

D.

In competence

Which of the following would NOT violate the CIMA Code of Ethics fundamental principle of confidentiality?

A.

Disclosing publicly available information

B.

Using sensitive information gained with a previous employer for the advantage of a new employer

C.

Not disclosing information if required to do so by law

D.

Disclosing confidential information to third parties

What is the public function of all accountants?

A.

To provide truthful and independent accounts of finances

B.

To give financial judgments to owners and shareholders

C.

To do a job and go home

D.

To represent the life-cycle of accounts

You are happy to be held accountable for your actions and hope that others can trust and depend upon you. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

A.

Respect

B.

Responsibility

C.

Reliability

D.

Timeliness

Being offered gifts and hospitality can give rise to threats to compliance with fundamental principles. Which of the following statements is NOT in accordance with the CIMA Code of Ethics?

A.

Accepting a gift may create self-interest threats to objectivity

B.

If a professional accountant accepts a substantial gift, the possibility of that offer being made public could result in intimidation threats

C.

The significance of threats will depend on the nature, value and intent behind the offer

D.

If a professional accountant believes that a gift of significant value is designed to influence his or her actions, then it is acceptable for him or her to accept the gift without disclosing details of the gift to colleagues or superiors

Which of the following statements is correct in relation to the civil law?

A.

All civil cases commence in the County Court.

B.

A breach of the civil law does not enable an injured party to claim compensation.

C.

A person may be prosecuted for a breach of the civil law.

D.

A tort is a civil wrong.

C sued D in the tort of negligence in order to recover compensation for injuries suffered as a result of D breaking his duty of care to C. For what injuries can C claim compensation?

A.

All reasonably foreseeable injuries caused by D.

B.

All injuries caused by D.

C.

All injuries which were a direct consequence of D's actions.

D.

All physical but not psychiatric injuries caused by D.

Matty dreams of owning his own business but can't be bothered to follow the steps involved in setting one up.

What should he do?

A.

Purchase an off the shelf company.

B.

Set one up anyway but only complete the most important steps.

C.

Walk away from his dream - the only way he can own his own business is by following the steps involved in setting one up.

D.

Become a sole trader.

Which of the following statements is correct in relation to private and public companies limited by shares?

A.

A private and public company are required to hold an AGM

B.

A public company cannot commence trading until it has satisfied minimum share capital requirements

C.

A public company is required to have at least one director

D.

A private company must have a qualified company secretary

Which of the following is an example of a safeguard created by the profession, legislation or regulation as opposed to a safeguard in the work environment?

A.

Leadership of the organization which stresses the importance of compliance with the fundamental principles

B.

Leadership of the organization which establishes the expectation that members of an assurance team will act in the public interest

C.

Professional standards

D.

An organization having documented internal policies and procedures requiring compliance with the fundamental principles

An internal auditor discovered evidence of a fraud earned out by an employee who worked in the accounting department. The auditor concluded that the fraud had been possible because of unsatisfactory segregation of duties in the department.

Poor segregation between which of the following duties would provide the best opportunity for this type of fraud to occur?

A.

Issuing both sales invoices and purchase invoices.

B.

Issuing sates invoices, and recording payments to suppliers in the ledger.

C.

Receiving payments from customers, and recording them in the ledger

D.

Receiving purchase invoices, and banking payments from customers.

Which ONE of the following is an example of a safeguard in the work environment as opposed to a safeguard created by the profession, legislation or regulation?

A.

Educational, training and experience requirements for entry into the profession

B.

Continuing professional development requirements

C.

Corporate governance regulations

D.

Leadership of a company that stresses the importance of compliance with the fundamental principles

Which THREE of the following are characteristics of Limited Liability Partnerships ("LLPs")?

A.

LLPs can enter into contracts in their own name

B.

LLPs have no perpetual succession

C.

An LLPs partners are jointly and severally liable for the debts of the LLP

D.

LLPs can hold property in their own name

E.

LLPs are usually created by formal registration under statute

AB Ltd contracted to deliver two desks and three filing cabinets to CD Ltd. On the day when delivery was due to take place AB Ltd did not have a vehicle with sufficient capacity to hold all the goods. As a result AB Ltd delivered the two desks only

 

Which of the following is correct?

A.

The contract between AB Ltd and CD Ltd is frustrated.

B.

CD Ltd is legally entitled to refuse delivery of the desks

C.

The failure to deliver the filing cabinets is a breach of a warranty which entitles CD Ltd to claim damages

D.

The delivery of the desks amounts to substantial performance of the contract and CD Ltd is obliged to pay the contract price less an amount for the defects in performance