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

1. Which of the following is incorrect in relation to the criminal law?

A) The purpose of the criminal law is to regulate behavior within society by punishment and deterrence.
B) All criminal cases commence in the Magistrates' Court.
C) A crime is regarded as an offence against society as a whole and the state will prosecute the offender on its behalf.
D) A breach of contract is a criminal offence.

2. V is an accountant for HIJ company. This large international jewelry manufacturer and retailer both mines, designs and sets and retails its gemstones It has significant mining operates in Country A and Country Z.
It has been a key player in the development of ethical employment mining practices especially in advanced safety policies and it received a United Nations award for action against Blood Diamonds It publishes a detailed CSR report which highlights how its approach to safety is a core business value and how its KPIs around employee turnover and accident have improved annually.
Vs company has recently appointed a new CEO who is taking an aggressive stance to improving profit margins and wants to reduce the expenditure on safety, a key aspect of the approach to ethical mining practices in HIJ company Which THREE of the following statements would V use to support the continuation of the ethical policy in this new culture? The ethical treatment of the mining workforce

A) increases productivity through fewer accidents and lower staff turnover
B) is the right thing to do
C) reduces the risk of accidents and HIJ company's insurance premiums
D) reflects HIJ company's core business values
E) improves HIJ company's reputation and access to investment from a wider range of investors

3. AB (Wholesalers) Ltd contracted to sell a quantity of television sets to DC (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 comply with their description.
Which of the following is correct?

A) The term is void.
B) The term is absolutely valid as it has been agreed by the parties to a non-consumer sale.
C) The term is illegal as it is a criminal offence to attempt to exclude any terms implied by the Sale of Goods Act 1979.
D) The term is void unless it can be shown to be reasonable, as this is a non-consumer sale.

4. In the event of the directors of a company limited by shares ignoring a provision in its Articles of Association which is for the benefit of the shareholders, which of the following is correct?

A) Individual shareholders may sue the directors for breach of contract.
B) Individual shareholders have no remedy against the company.
C) Any or all of the shareholders may sue the company for breach of contract.
D) The shareholders as a whole may sue the directors for breach of contract.

5. Wye Ltd is considering appointing Anne as a director of the company. Which of the following is incorrect?
(i) If Anne is an un-discharged bankrupt, she cannot act as a company director.
(ii) If Anne is the subject of a disqualification order, she cannot act as a company director.
(iii) If Anne has already been appointed a director of another company, she cannot also act as a director of Wye Ltd.

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

Solutions: