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

1. The Professional Accountant should always:

A) Think professionally; act personably; continue to question
B) Think objectively; act professionally; continue to learn and develop
C) Think accurately; act purposefully; continue to learn and develop
D) Think subjectively; act professionally; continue to question

2. An internal auditor discovered evidence of a fraud earned out by an employee who worked in the accounting department. The auditor concluded that the fraud had been possible because of unsatisfactory segregation of duties in the department.
Poor segregation between which of the following duties would provide the best opportunity for this type of fraud to occur?

A) Receiving payments from customers, and recording them in the ledger
B) Issuing sates invoices, and recording payments to suppliers in the ledger.
C) Issuing both sales invoices and purchase invoices.
D) Receiving purchase invoices, and banking payments from customers.

3. When might an ethical dilemma occur?

A) All of the above
B) When there is a conflict of interest
C) When a code of ethics provides clear guidance on next steps
D) When legislation dictates the appropriate course of action

4. Which of the following statements is correct?
(i) As a general rule the acceptance of an offer is only effective when it has been communicated to the offeror.
(ii) A person must know of an offer before he or she can accept it.
(iii) A request for further information has the effect of destroying the original offer.

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

5. Tom is a director of XYZ Ltd. The company is considering purchasing Tom's business for £200,000. Which of the following is incorrect?

A) The shareholders may approve the arrangement by passing an ordinary resolution.
B) The purchase consideration may be in the form of cash or shares.
C) Tom must formally disclose his interest in the contract to the board.
D) Tom cannot contract with XYZ Ltd as he would be placing himself in a conflict of interest and duty situation.

Solutions: