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

1. Who is involved in the third party relationship?

A) Auditor, stakeholders, government
B) Auditor, shareholders, employees
C) Auditor, shareholders, directors
D) Auditor, stakeholders, directors

2. Adam, Brian, Charles and David each held 25% of the issued share capital of ABCD Ltd. Adam has recently issued further shares to himself in order to increase his voting power. Which of the following is incorrect?

A) The shareholders may ratify the share issue by ordinary resolution.
B) The shareholders may challenge the validity of the share issue using Section 994 of the Companies Act
2006, on the ground that the issue is "unfairly prejudicial to the interests of the shareholders".
C) The company may proceed against Adam for breach of fiduciary duty.
D) The share issue is automatically invalid.

3. The board of Zed Ltd wishes to borrow money from Exe Bank plc. What authority will the board require to enable it to proceed?

A) An ordinary resolution
B) A board resolution
C) A written resolution
D) A special resolution

4. Which of the following best describes the consequences of being found to be unethical for an individual CIMA member?

A) Loss of reputation, credibility and Chartered Institute status.
B) Loss of reputation, public trust and customers
C) Loss of reputation, status and earning potential.
D) Loss of reputation, suppliers and customers

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

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

Solutions: