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

1. Jo is employed as management accountant of a large retailer. Jo has been asked to dismiss one of her colleagues for 'misconduct', but she is aware that the colleague has done nothing wrong and that her employer is trying to avoid paying any redundancy settlement. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

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

2. Which of the following statements is correct?

A) An employer has no duty to provide a reference.
B) An employer only has a duty to provide a reference for employees with one year's continuity of employment.
C) An employer has a duty to provide a full and comprehensive reference.
D) An employer has a duty to provide a reference.

3. Which THREE of the following statements are correct in relation to the essential elements of a contract?

A) Even if the parties are fully in agreement, the agreement will be unenforceable unless at least one of the parties has provided consideration
B) A conditional offer cannot be accepted until the condition has been satisfied
C) A revocation of an offer is only valid when it is received by the offeree, unless it is sent by post in which case it is valid as soon as it is posted
D) A request for further information in relation to an offer has the effect of cancelling the offer
E) Once an offer has been made it does not exist forever but will lapse after a reasonable time
F) If an offer is rejected it can only be revived by the person who made the offer

4. An internal auditor discovered evidence of a fraud earned out by an employee who worked in the accounting department. The auditor concluded that the fraud had been possible because of unsatisfactory segregation of duties in the department.
Poor segregation between which of the following duties would provide the best opportunity for this type of fraud to occur?

A) Receiving payments from customers, and recording them in the ledger
B) Issuing both sales invoices and purchase invoices.
C) Receiving purchase invoices, and banking payments from customers.
D) Issuing sates invoices, and recording payments to suppliers in the ledger.

5. Natthapong's toilet won't flush, so he hires a plumber to come over and fix it.
He tells the plumber what the problem is, and the plumber agrees to fix it.
However, once the builder supposedly finishes the job, Natthapong finds that it still won't flush.
Is he able to terminate the contract?

A) No - Once he's offered the plumber the job he is unable to terminate the contract.
B) Yes - The plumber did not fix the toilet and so the offer cannot be accepted.
C) Yes - He is able to terminate the contract at any time, even if the plumber did fix the toilet.
D) No - Even if the plumber hasn't fixed the toilet he has still given up his time and effort and should therefore be paid.

Solutions: