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

1. As stated in the CIMA Code of Ethics, the two key attributes of independence used in connection with the assurance engagement are:

A) Independence of mind and in appearance
B) Independence of mind and in belief
C) Independence of belief and in appearance
D) Independence of mind and in diligence

2. Which of the following statements regarding companies limited by shares and general partnerships is correct?

A) Both a private company limited by shares and a general partnership are established by registration
B) Unlike a general partnership, a private company limited by shares may create a floating charge as security for a loan
C) In the event of insolvency both a private company limited by shares and a general partnership may be placed in insolvent liquidation
D) Private companies limited by shares and general partnerships are required to disclose financial information regarding the operation of the business to the general public

3. Which of the following is correct in relation to the control of boards of directors of public limited companies?
i. The boards of public limited companies are under the legal control of the shareholders ii. The majority of the shares in public limited companies are held by institutional investors who are more concerned with capital growth and income than the internal management of public limited companies iii. As a general rule, private investors in the shares of public limited companies have insufficient power to influence the activities of the board.

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

4. The IFAC Code of Ethics applies:

A) To those accountants whose employers sign up to the principles of acting ethically
B) To all professionals, including accountants
C) To accountants by law
D) To accountants around the world

5. Which of the following is not an equitable remedy?

A) An injunction.
B) Specific performance.
C) Damages.
D) Rescission.

Solutions: