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

1. Y is completing an internal audit work on the system to approve suppliers to JKL Company. Which of the following would NOT promote a sustainable approach to the company's relationship with it\suppliers?

A) Each year approval as a supplier to the company will only be granted if the prices paid to the supplier are reduced by 1%
B) Each supplier must comply with JKL's policy on limiting non-recyclable packaging to 10% of total packaging per contract
C) Preference will be given to local suppliers over those located at a greater distance from the company
D) Haulage firms must demonstrate that they have a policy to reduce emissions from their fleet

2. Which of the following terms can be defined as follows?
"...the generic way that organizations are run"

A) Social responsibility
B) Ethics
C) Corporate governance
D) Professional behavior

3. Which of the following is incorrect?

A) A floating charge must be registered at the company's registered office, but a failure to do so does not affect the validity of the charge.
B) A floating charge is a charge over a class of assets which change from time to time.
C) A floating charge is a charge over a class of company assets which the company is unable to deal with freely in the ordinary course of business.
D) A floating charge must be registered at Companies House within 21 days of its creation, otherwise the charge is void against the other creditors.

4. You work for a chain of coffee shops who are proud of their sustainable credentials and have used their claim to recycle all of their disposable cups as part of their brand identity. An audit has revealed that staff in one region (West) are mixing these cups into normal waste and sending them to landfill in spite of the ethical code of practice of the company Which TWO of the following might explain why the code has failed to promote the desired behavior?

A) The regional manager of the West branch has not been checking on the recycling reports which would have highlighted this issue and so there have been no adverse consequences to the staff concerned
B) A recent focus on staff efficiency in the West region failed to reflect the time needed to sort the recycle waste from normal waste at the end of the day West store managers and teams were rewarded on efficiency and not recycle rates.
C) A recent focus on staff efficiency in the West region failed to reflect the time needed to sort the recycle waste from the normal waste at the end of the day. West store managers were rewarded for their recycle rates and these are published in a district league table each quarter.
D) The induction programmer for new staff has been recently updated and the section on recycling procedures has been inadvertently dropped. The initial staff training is done in the store through shadowing experienced staff for a month before any tasks are attempted unsupervised
E) The regional manager has been actively promoting expanded green programs through a Green West is Best initiative which has involved all store managers and teams in the West region

5. What is an essential quality for a professional accountant?

A) Listening skills
B) Ethical acumen
C) Emotional intelligence
D) Emotional sensitivity

Solutions: