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

1. In the UK, which organization that governs the accounting profession has taken the lead with respect to ethical considerations?

A) The International Accounting Standards Board
B) The Financial Standards Accounting Board
C) The Accounting and Auditing Policy Committee
D) The Financial Reporting Council

2. Which of the following is correct in relation to the equitable remedy of rescission?
(i) Rescission is available in the event of any breach of contract
(ii) The victim of misrepresentation may automatically claim rescission (iiI) The purpose of rescission is to return the parties to their pre-contract position.

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

3. X, Y and Z are the only shareholders in XYZ Ltd each holding 1,000 ordinary £1 shares. X is the only director of the company. The articles of association of XYZ Ltd provide that "in the event of any proposal to dismiss a director by ordinary resolution, the votes of the director are to count 3 times." Which ONE of the following is CORRECT?

A) The clause in the articles cannot be used by X as it is not an ordinary membership right.
B) X will be able to rely on the provision in the articles and outvote any proposal to dismiss him as a director.
C) The provision in the articles is void as it effectively means that X is irremovable as a director of XYZ Ltd.
D) The company would be able to pass a special resolution removing the provision in the articles and then dismiss X by passing an ordinary resolution.

4. Which of the following need NOT be submitted in order to register a private company limited by shares?
(i) Articles of association
(ii) The name of the company secretary
(iii) A statement of share capital

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

5. Your boss knows that you will always strive to deliver a project on time and on budget. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

A) Courtesy
B) Timeliness
C) Respect
D) Reliability

Solutions: