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

1. Which of the following is NOT an essential element of a valid simple contract?

A) Written terms.
B) Consideration.
C) Intention to create legal relations.
D) Agreement.

2. ABC plc has acted in breach of its health and safety obligations and this has led to a number of employees and members of the public being injured.
Which of the following is correct?
The breach could give rise to:
i. Civil claims on the part of the employees and members of the public
ii. Enforcement action by the Health and Safety Executive
iii. Criminal sanctions against ABC plc

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

3. In relation to the law of misrepresentation, which of the following statements is incorrect?

A) A false statement of fact may give rise to remedies in both contract and tort.
B) A victim of fraudulent misrepresentation may seek rescission and damages.
C) Damages are available for innocent misrepresentation under the Misrepresentation Act.
D) Misrepresentation renders a contract voidable.

4. R, S and T are the only shareholders in RST Ltd each holding 5,000 ordinary £1 shares. R is the only director of the company. The articles of association of RST contain the following provisions:
1. R is to be a director of RST Ltd for life.
2. In the event of any resolution to dismiss R by ordinary resolution his votes shall count three times.
Which of the following is CORRECT?
(i) Provision 1 is void as a director cannot be appointed for a period exceeding 3 years.
(ii) Provision 2 is valid and R may outvote any proposed resolution to dismiss him.
(iii) Provisions 1 and 2 are both unenforceable by R as they are not ordinary membership rights.

A) (iii) only
B) (i) and (iii) only
C) (ii) only
D) (i) only

5. Jo is employed as management accountant of a large retailer. Jo has been asked to make a payment to a bogus supplier that she believes would constitute money laundering. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

A) Professional behavior
B) Integrity
C) Confidentiality
D) Objectivity

Solutions: