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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:
1. Which of the following is an advantage of carrying on a business through the medium of a private company limited by shares?
A) The ability to keep the articles of association private
B) The fact that business can be carried on with a minimum of two directors
C) The fact that business can be earned on with a minimum of one company secretary.
D) The ability to carry on business without holding an annual general meeting
2. Immediately before being placed in creditors voluntary liquidation, Tom, the sole director of Bee Ltd, arranged for the company to make an early repayment of an unsecured loan made to Bee Ltd by his wife Anne. Which of the following is correct?
A) The company has given a "preference" to Anne, and the court may make any order it thinks fit to restore the position to what it was before Anne was repaid.
B) The company has entered into a "transaction at an undervalue" with Anne, and the court may fine or imprison Tom.
C) The transaction amounts to "wrongful trading" and Tom may be held personally liable up to the amount of the loan.
D) The company has acted in breach of fiduciary duty and can be made liable up to the amount of the loan.
3. Which of the following statements is true?
A) The CIMA and IFAC codes take a very different approach
B) The CIMA Code of Ethics is compliance based while the IFAC Code of Ethics is principles based
C) The CIMA Code of Ethics is based on the IFAC Code of Ethics
D) The IFAC Code of Ethics is based on the CIMA Code of Ethics
4. Which of the following is incorrect?
(i) All contracts must be in writing.
(ii) A contract to sell land must be in writing.
(iii) A contract of employment must be in writing.
A) (i) only
B) (i) and (iii) only
C) (ii) and (iii) only
D) (i), (ii) and (iii).
5. Which of the following is INCORRECT in relation to the United States of America (USA)?
(i) In the event of a conflict between state and federal legislation, state legislation is superior.
(ii) The USA has a federal system of government.
(iii) Legislation is enacted by Congress.
A) (i) only
B) (iii) only
C) (i) and (iii) only
D) (i) and (ii) only
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: A | Question # 3 Answer: C | Question # 4 Answer: B | Question # 5 Answer: A |



