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

1. Which of the following statements is incorrect in relation to the revised derivative action under section
260 of the Companies Act 2006?
(i) The action may be brought by a single shareholder.
(ii) The action may be brought in relation to an act of negligence by the directors.
(iii) The action cannot be brought in respect of a proposed act by the directors.

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

2. Which of the following are situations involving familiarity threats? Select ALL that apply.

A) Angela - Has worked on the production line for the past seven years.
B) Steve - A business manager who hires his 18-year-old son for a managerial level job.
C) Bryan - Has worked as an accountant for the past ten years. He always makes sure he is up-to-date with changes in the industry.
D) Kay - A department manager who doesn 't reprimand one of her team members for doing a job wrong because they are friends.
E) Steve - Conducts monthly reviews of his team's performance (the team hasn't changed for the past five years).

3. Which TWO of the following options describe safeguards that the CIMA Code of Ethics states may eliminate or reduce threats to compliance with fundamental principles to an acceptable level?

A) Safeguards in the governance environment
B) Safeguards created by the profession, legislation or regulation
C) Safeguards in the work environment
D) Safeguards created by the Financial Reporting Council

4. Which of the following statements is correct?
(i) As a general rule the acceptance of an offer is only effective when it has been communicated to the offeror.
(ii) A person must know of an offer before he or she can accept it.
(iii) A request for further information has the effect of destroying the original offer.

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

5. Tee Ltd has contracted to use Vee Ltd's "Grand Hotel" for a business conference. Which of the following would not be regarded as a valid excuse for Vee Ltd for the unavailability of the hotel on the agreed date?
(i) The hotel was closed due to flood damage.
(ii) The hotel was double booked.
(iii) The hotel manager had arranged to have the hotel redecorated; the decorators had failed to complete the work by the agreed date.

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

Solutions: