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

1. What, according to CarlyFiorina, CEO of Hewlett Packard, is the spirit of a code of ethics:

A) "It is doing the right thing, because it's for the best"
B) "It is doing the right thing when no-one is watching"
C) "It is doing the right thing because you have to"
D) "It is doing the right thing because everybody is watching"

2. Which THREE of the following are examples of a fraudulent action against a company?

A) The omission of an invoice from the purchase ledger due to it being mis-filed in the petty cash invoices.
B) The sending of a bogus invoice to another company
C) The loss on the sales of a car due to its accumulated depreciation on the day of sale being too low as a consequence of a depreciation policy of 25%
D) The selection of an incorrect accounting policy by the management team whereby sales of goods are recognised on the day that the order is placed despite the company policy of a three day cooling off period
E) The theft of cash from the cash till by an employee.
F) The misallocation of a transaction against the incorrect account code in the general ledger

3. Which of the following statements is correct in relation to business organisations?

A) Although a public company may offer its shares and securities to the general public it can only do so if it is listed on a stock exchange
B) A general partnership and a private limited company can be formed without the need for any written documents
C) A limited liability partnership is a separate legal entity distinct from the partners in a similar way to how a private company is a legal entity distinct from its shareholders and directors
D) In the event of a company limited by shares going into insolvent liquidation the shareholders become fully liable for the debts of the company

4. Demonstrating an attitude of esteem, deference, regard or admiration of others reflects the personal quality identified by the CIMA Code of Ethics as:

A) Reverence
B) Respect
C) Reliability
D) Responsiveness

5. Paschal has just passed his CIMA certificate exams and on doing so joined Un-Ethi-Cal Ltd for his first accountancy role.
Upon arrival he was been asked to do his company's corporation tax return, and not wanting to seem as if he was not keen in his first week, tells them he knows what to do and so goes online to find out how to do it.
He's got to go to a party that night, so although he can't work it out properly he fills in the form as best he can so he can get out on time.
Unfortunately, Paschal has breached CIMA's five fundamental ethical principles.
Which of the following has Paschal breached?
Select ALL that apply.

A) Professional behaviour + Integrity
B) Confidentiality + Professional competence and due care
C) Objectivity + Confidentiality
D) Integrity + Objectivity
E) Integrity + Professional competence and due core
F) Confidentiality + Professional competence and due care
G) Professional behaviour + Objectivity

Solutions: