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

1. Which of the following might a company experience if they were to implement internal control measures?
Select ALL that apply.

A) More control
B) A requirement to hire external auditors
C) Reduced risk
D) Less paper work
E) Less bureaucracy

2. M's client has asked her to 'leave out' a few figures as he is applying for a bank loan and he wants his management accounts to, in his words, 'look better'. If M does as he asks, he promises to pay her double her fee when the loan money comes through. M is tempted by his offer, her mother has been ill and she would love to take her away on holiday. What should she do?

A) Do as the client asks; her mother's health is more important than her professional standing
B) Do as the client asks, after all the banks can afford it
C) Tell the client she is unable to do as he asks, but that she knows another accountant who is happy to do that kind of thing
D) Tell the client she is unable to do as he asks, but she would be happy to write a letter to the bank explaining his financial position

3. Which of the following CANNOT be carried out by a simple contract?

A) A contract for the sale of land.
B) A contract of employment.
C) A contract for the provision of services.
D) A contract for the sale of a motor car.

4. DGH is a company operating in the oil and gas industry, which is heavily regulated. The government is considering introducing a new law which is likely to result in a dramatic cut in profitability for DGH.
Which of the following is NOT a legitimate method for DGH to influence government policy in its own best interests?

A) Attempting to influence public opinion in order to put pressure on the legislative agenda
B) Offering financial incentives to public officials to use their influence on DGH's behalf
C) Inviting government ministers to attend the next board meeting of DGH to allow the directors to put forward their view
D) Employing lobbyists to put DGH's case to ministers or civil servants.

5. Matty dreams of owning his own business but can't be bothered to follow the steps involved in setting one up.
What should he do?

A) Set one up anyway but only complete the most important steps.
B) Walk away from his dream - the only way he can own his own business is by following the steps involved in setting one up.
C) Become a sole trader.
D) Purchase an off the shelf company.

Solutions: