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

1. CIMA's Code of Ethics would be violated if a professional accountant accepted a fee for work which is:

A) payable once a specified finding has been attained
B) based on a price quotation submitted in competitive bidding
C) fixed by a company's ethics committee
D) based on a quotation fixed in advance of the work being earned out

2. Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?
"A professional accountant should be straightforward and honest in all professional and business relationships"

A) Objectivity
B) Integrity
C) Confidentiality
D) Professional behavior

3. Which ONE of the following statements is correct in relation to the UK Corporate Governance Code?

A) If a listed public company fails to produce a report explaining why it has not implemented the Code's recommendations, it has acted in breach of the Code
B) If any company fails to comply with the Code, the directors may be sued for breach of duty by the company on behalf of the shareholders
C) If a public company fails to comply with the Code, it may be sued for breach of statutory duty by those who have suffered loss as a result
D) If the Code is ignored by any company, no action may be taken as it has no legal status

4. A business that behaves ethically may experience which of the following benefits; Select ALL that apply.

A) Improved reputation
B) Little or no legal action
C) Increased market penetration
D) Increased profits
E) Competitive advantage
F) Improved staff morale
G) Higher productivity levels

5. P is an accountant working in a business Which of the following circumstances might create a self- interest threat for P in her professional role?

A) P is concerned over her employment security
B) P is required to review data after previously being involved in its preparation
C) A client is threatening P's dismissal over a disagreement about the review of accounting policies
D) The company is being threatened by litigation

Solutions: