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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. Which of the following is correct?
(i) A public company must hold an AGM.
(ii) A public company must give at least 14 days' notice of its AGM.
(iii) One of the purposes of an AGM is to provide an annual opportunity for the shareholders to question the directors regarding their management of the company.

A) (i) and (ii) only
B) (i) only
C) (ii) and (iii) only
D) (i) and (iii) only

2. 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 injuries caused by D.
B) All reasonably foreseeable injuries caused by D.
C) All physical but not psychiatric injuries caused by D.
D) All injuries which were a direct consequence of D's actions.

3. Which of the following statements is correct?

A) An employer has a duty to provide a reference.
B) An employer has a duty to provide a full and comprehensive reference.
C) An employer only has a duty to provide a reference for employees with one year's continuity of employment.
D) An employer has no duty to provide a reference.

4. How might an organization exercise ethical control over its staff? Select ALL that apply.

A) Ensure that hired employees have a strong set of moral values and principles that they take into account when making decisions.
B) Ensure that all employees adhere to a rules-based approach.
C) Ensure that all employees adhere to a conceptual framework.
D) Ensure than an organizational culture is developed and adhered to.
E) Ensure that the company has its own ethical code that is communicated and followed.

5. S is management accountant for a small retail company. S has discovered a possible fraud in the purchasing department. The manager of that department has told S that he is aware of the fraud and will 'deal with it'.
Which ONE of the following would it be appropriate for S to do?

A) Nothing
B) Bring the matter to the attention of the police
C) Advise a director of the company
D) Ask for advice from the company's external auditors
E) Ask for confirmation in writing from the manager

Solutions: