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CIMA BA4 Exam Syllabus Topics:

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

1. Intimidation threats to compliance with fundamental principles are described as threats that may occur

A) when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment
B) when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised
C) as a result of the financial or other interests of a professional accountant or of an immediate or close family member
D) when a professional accountant may be deterred from acting objectively by threats, actual or perceived

2. T contracted to buy a washing machine from AB (Retailers) Ltd for his personal use at home. The contract contained a term excluding liability for any breach of the condition implied by the Sale of Goods Act 1979 that the goods should be of "satisfactory quality". The contract was on AB (Retailers) Ltd's standard form contract.
Which of the following is correct?
(i) Conditions implied by the Sale of Goods Act 1979 cannot be excluded in any sale.
(ii) This is a consumer sale and the clause excluding liability is void.
(iii) This is a non-consumer sale and the clause is void unless reasonable.

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

3. Which of the following is incorrect?
(i) Legal title cannot pass on a contract induced by misrepresentation.
(ii) Misrepresentation renders a contract voidable.
(iii) A victim of negligent misrepresentation may seek rescission and damages.

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

4. Which of the following is not financial assistance for the purchase of a public company's own shares?

A) A loan by a company outside the ordinary course of business
B) Releasing a shareholder from a debt owed to the company
C) The payment of a dividend which has the effect of putting a shareholder in funds and enabling him to purchase the company's shares
D) Allowing the use of a company's assets as security for a loan

5. Which of the following is INCORRECT in relation to directors' duties?
i. Directors who arrange for shares to be offered directly to their supporters in order to prevent a take- over bid are acting lawfully so long as they have the legal power to allot shares in the company's constitution.
ii. Directors may act in breach of their duties and still be complying with the UK Corporate Governance Code.
iii. Directors' duties are owed to the shareholders as a body and enforceable by the company.

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

Solutions: