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

1. An ethical dilemma generally refers to:

A) a particular position on the spectrum of ethical philosophies
B) a deadlock in commercial disputes
C) two or more possible solutions to an ethical problem
D) two or more opinions on the spectrum of ethical philosophies

2. Which ONE of the following was NOT a recommendation of the Cadbury Committee Report 1992?

A) Executive directors should not be offered service contracts for more than five years unless approved by the shareholders in a general meeting
B) The remuneration packages of executive directors should be agreed by a remuneration committee wholly or mainly comprising non-executive directors
C) An audit committee consisting of a majority of non-executive directors should be established to oversee the company's finances
D) Independent non-executive directors should be appointed to the boards of listed companies

3. Which of the following statements is correct?

A) The Articles of Association of a private company limited by shares may be altered by a special resolution.
B) The Articles of Association of a private company limited by shares may be altered by a board resolution.
C) The Articles of Association of a private company limited by shares may be altered by a written ordinary resolution.
D) The Articles of Association of a private company limited by shares may be altered by ordinary resolution.

4. Which of the following statements is INCORRECT?
i. A contract is a voluntary agreement whereas obligations in the tort of negligence are imposed by the state.
ii. Damages are only available for breach of contract and breach of the tort of negligence if damage, injury or loss has been suffered by the claimant.
iii. A contract breaker is liable whether or not he is at fault whereas to be liable in the tort of negligence the defendant must have been at fault.

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

5. Y has an opening at his company for a trainee accountant. His nephew is just about to leave school, and Y receives a call from his sister suggesting that her son should get the job. Y's firm has a strict policy with regards to the employment of family members, especially in finance departments. But for Y, looking after his family is very important, and he is sure he will be an excellent staff member. Y has an ethical dilemma because there is tension between:

A) His personal and professional values
B) His professional and corporate values
C) His personal and corporate values
D) His personal and societal values

Solutions: