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

1. Which of the following groups is a financial as opposed to a non-financial stakeholder of a company?

A) Employees
B) Journalists
C) Local charities
D) Competitors

2. According to the CIMA code of ethics, if appropriate safeguards cannot be identified to address threats to compliance with fundamental principles, a professional accountant should:

A) Proceed with necessary caution
B) Identify the situation to superiors before continuing with the professional service involved
C) Proceed unless the situation will involve breaking the law
D) Refuse to remain associated with the matter creating the conflict, where possible

3. Which of the following statements is correct?

A) An employer is vicariously liable for all the acts committed by employees and independent contractors.
B) An employer is vicariously liable for all torts committed by employees and independent contractors.
C) An employer is vicariously liable for all acts of his employees committed in the course of their employment.
D) An employer is vicariously liable for torts committed by his employees in the course of their employment.

4. Mr X's wife is gravely ill. He accepts money from a client to falsify some accounts. The client is a contractor, being paid by the Government to build a bridge over a river. The accounts now state that more expensive materials were used to build the bridge. The money helps Mr X pay for his wife's medical treatment. Is this an example of a 'victimless crime'?

A) No. The contractor is being paid to build a bridge with tax payers' money. If it is built with poor quality materials it may collapse, wasting money, and potentially causing an accident
B) Yes. Mr X needed the money to help his wife - family is more important
C) Yes. Mr X used the money to get help for his wife. The bridge was built anyway
D) Yes. Mr X has a duty to do as his client asked

5. In relation to conditions and warranties, which of the following statements is correct?

A) A breach of a warranty entitles the party not in breach to cancel the contract
B) To be effective a condition must be expressed in the contract
C) A warranty may be implied into a contract on the basis of a trade custom.
D) A breach of a condition entitles the party not in breach to claim damages only

Solutions: