BA4 Exam Dumps - Fundamentals of Ethics - Corporate Governance and Business Law

Pascal later heads off to the party where he proceeds to tell everyone about his amazing first day at work and the huge profits his new company are making and how much he's already saved them. "My future is bright"

he tells everyone!

Again, Pascal has breached CIMA's ethical principles.

Which of the following has he breached?

Select ALL that apply.

Which of the following would NOT violate the CIMA Code of Ethics fundamental principle of confidentiality?

Which of the following is correct?

(i) Purchasing a "shelf company" enables business to commence more quickly.

(ii) It is generally cheaper to purchase a "shelf company", than to arrange for a solicitor or accountant to register a new company.

(iii) Incorporating a company by registration enables the company's documents to be drafted to the particular needs of the incorporators.  

How many fundamental principles are identified by the CIMA Code of Ethics?

Which of the following statements is correct?

In the event of a conflict between European Law and French Law which will prevail?

  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.

An ethical dilemma generally refers to:

Which of the following statements is incorrect in relation to a public company limited by shares?

Which of the following terms can be defined as follows?

 

"...the system by which companies are directed and controlled"

Which of the following may cause a director to be disqualified from acting as a director under the Company Directors Disqualification Act 1986? 

(i) Persistent default by the director in complying with the filing requirements under the Companies Acts.

(ii) Causing a company to continue to trade at a time when the director ought to know that insolvency is inevitable.

(iii) Carrying on business with intent to defraud creditors.

Which of the following contracts might be specifically enforceable?

What is the purpose of the equitable remedy of rescission?

In regards to a claim of misrepresentation, which of the following must be proved to show that the defending party induced the other party into entering the contract?

Select ALL that apply.

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

Anne, Bill, Chris and Diane are the only directors of ABCD Ltd. Bill is the Chairman of the board and has a casting vote. A board meeting was called to consider a proposal to enter into a contract with EFG Ltd. Which of the following is INCORRECT?

Which of the following identifies civil as opposed to criminal proceedings? 

i. The case was heard by the Magistrates Court.

ii. The case was brought by a claimant.

iii. The case was proved on the balance of probabilities. 

Which of the following statements is INCORRECT?

Which of the following is correct in relation to a company's ability to have a restricted objects clause in its constitution?

(i) A company may restrict its objects in its constitution

(ii) Any clause restricting the company's objects should be included in the company's articles of association

(iii) The shareholders may pass a special resolution to alter the company's constitution by including a clause which restricts the company's objects

Which of the following is one of the fundamental principles identified in the CIMA Code of Ethics?

Which of the following is NOT a personal quality expected of professional accountants by CIMA?

In which of the following business organisations do the members have limited liability and the ability to keep the constitution private?

In relation to the law of misrepresentation, which of the following is correct?

In the event of a breach of contract, what is the purpose of damages?

(i) To punish the contract breaker.

(ii) To compensate the innocent party.

(iii) To ensure that the innocent party makes a profit.

Exe Ltd has five members. A has 90% of the shares and the other four members holds 2.5% of the shares each.

 

Which of the following is correct in relation to the calling of a general meeting on short notice?

J is at his company's reception desk when the promotions manager of a new restaurant and bar nearby hands him a number of vouchers for cheap meals and drinks. At the promotion manager's request, J agrees to share out the vouchers among his company's employees. J does not earn much and is tempted to keep the vouchers for himself and his friends. Is this an ethical issue and why?

The majority of developed countries require publicly quoted companies and large companies to produce annual financial statements which are then audited by an external auditor.

Which of the following statements regarding the requirement for external audit is Incorrect?

Regarding auditor remuneration, a self-interest threat to professional competence and due care is created if

You work for an international mining company. Which of the following corporate issues is NOT related to ethics or social responsibility?

Tom is a director of XYZ Ltd. The company is considering purchasing Tom's business for £200,000. Which of the following is incorrect?       

Which of the following is INCORRECT in relation to the recommendations of the Greenbury Committee Report of 1995?

Which of the following is correct?

i. A company intending to issue new shares for cash must first offer them to the existing shareholders.

ii. A company may dispense with the requirement to offer new shares to existing shareholders by passing a special resolution.

iii. A company issuing shares for a non-cash consideration is not required to offer the shares to the existing members first.

Although no-one has reason to suspect, you have taken a violent dislike to a particular assurance client. This could severely affect your independence:

Which ONE of the following in INCORRECT in relation to a Limited Liability Partnership (“LLP”)?

Which of the following remedies is available as of right in the event of a breach of contract?

(i) Specific performance.

(ii) Damages.

(iii) An injunction.

Company B wants to implement ethical control over its staff. It wants to do this by implementing a strong organisational culture.

Which of the following are ways in which the organisation could exercise control in regards to its organisational culture?

Select ALL that apply.

A was disqualified from driving but continued his employment as a driver for XYZ plc. The company discovered that A had lost his driving license and immediately dismissed him without notice.  

 

Which of the following is correct? 

 i. As no notice was provided A's dismissal amounts to constructive dismissal.

ii. The employer was justified in dismissing A without notice as he was unable to continue his employment.

iii. A may make a claim for wrongful dismissal as, although his dismissal was justified, he was entitled to notice.  

If financial statements give a true and fair view, then they:

Which of the following is correct?

(i) A contract for the sale of land must be in writing.

(ii) A consumer credit agreement must be in writing.

(iii) A contract of employment must be in writing.

Mr X's wife is gravely ill.  He accepts money from a client to falsify some accounts. The client is a contractor, being paid by the Government to build a bridge over a river. The accounts now state that more expensive materials were used to build the bridge. The money helps Mr X pay for his wife's medical treatment. Is this an example of a 'victimless crime'?

Lotl is a well-known supermarket chain that has recently come under fire for not encouraging diversity within the organisation.

Because of this, it has been making efforts to make the business more diverse.

Which of the following are ways Lotl might do this?

Select ALL that apply.

Which of the following governs all public sector employees?

How might an organization exercise ethical control over its staff? Select ALL that apply.

Completing work within established deadlines reflects the personal quality identified by the CIMA Code of Ethics as:

Which of the following is CORRECT?

(i) A company limited by shares is a legal person separate and distinct from those who own and manage the company

(ii) If the company structure is used as a mere façade for fraudulent purposes the company but not the directors or shareholders can be held liable

(iii) If the company has carried on business despite the fact that insolvency appeared inevitable the directors may be personally liable for the debts contracted.

In relation to directors, which of the following statements is incorrect?

You are the financial controller of SB Company, responsible for directing the budgeting process For the current year, you were instrumental in gaming approval of a particular manager's budget without modification. As a token of appreciation, the manager has given you a gift voucher for a local restaurant In considering whether or not to accept the gift, you should refer to which of the following fundamental ethical principles?

When preparing financial statements, you are extremely careful not to omit relevant information, mislead readers or misstate facts. This demonstrates the CIMA Code of Ethics fundamental principle of:

Being able to be trusted by others to be dependable reflects the personal quality identified by the CIMA Code of Ethics as:

Which of the following is not an equitable remedy?

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

Which of the following is incorrect in relation to the remedy of damages?

Which of the following statements is correct?

(i) An employer may rely on information discovered after an employee's dismissal to justify a wrongful dismissal.

(ii) An employer may rely on information discovered after an employee's dismissal to justify an unfair dismissal.

(iii) An employment tribunal will take into account the employee's conduct when determining how much compensation for unfair dismissal to award.   

A situation has arisen which will involve you participating in transactions which are legally correct but ethically unsound.

 

Which of the following is correct?

 

(i) It is not possible for a transaction to be both legal and ethically unsound.

(ii) As long as the transactions are legal you are acting properly in participating.

(iii) One of the purposes of ethical codes is to guide professionals as to how to behave even when the proposed transactions are legal.

Which of the following is the responsibility of the Chairman, according to the UK Corporate Governance Code?

Which of the following is an 'interest stakeholder' in an organization?

Which of the following statements is correct?

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

Which of the following statements apply to multinational corporations? Select ALL that apply.

High profile corporate scandals in the past decade have had an effect on which of the following?

Which of the following is presumed not to be intended to create legal relations? 

Steve manages the accounts for a large software company. He's good at his job, though it has recently emerged that he is going through quite a messy divorce.

Why should the company's senior management be most concerned?

S is management accountant for a small retail company. S has discovered a possible fraud in the purchasing department. The manager of that department has told S that he is aware of the fraud and will 'deal with it'.

 

Which ONE of the following would it be appropriate for S to do?

You always take the time to be polite to colleagues and listen to the opinions of others, even if you might disagree with their views. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

B is invited to a big tennis final by one of her clients. Afterwards there is a private party at the client's home. B has too much to drink, and the client ends up sending her home in a taxi.  Which fundamental principle has B failed to live up to?

Which of the following statements are correct in relation to the purpose of the OECD principles of corporate governance?

1. The principles are regarded by OECD members as representing a common basis essential for the development of good corporate governance practice

2. The principles are intended to be a substitute for individual government's proposals for governance best practice.

3. The principles are intended for the use of OECD members only.

According to Carroll's model of CSR, which of the following is TRUE of a company's legal responsibility?

S Ltd has an issued share capital of 1000 ordinary shares of £1 each.  Some of the shareholders would like to change the name of the company.  What is the minimum number of votes which must be cast in favor of the resolution to make it effective?

Which of the following is INCORRECT?

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.

Which of the following statements are correct in relation to an offer?

1. An offer may be made to the whole world

2. An offer cannot be withdrawn until the offeree has had the opportunity of accepting or rejecting the offer.

3. An item in a shop window marked "Special Offer" is not an offer in law.

Which of the following is incorrect in relation to the criminal law?

Who is involved in the third party relationship?

You work for an airline company and discover a series of regular payments made to a lobbying group that campaigns to allow people freedom to fly as and when they choose without being taxed for contributing to global warming. The group's website includes specific commentary that claims to 'expose the myth of global warming'. Neither your company nor the lobbying group (which describes itself as 'independent') mention the financial link between your organizations. Is this an ethical issue and why?

Zed Bank plc has agreed to allow Exe Ltd an overdraft of £50,000 subject to a fixed and floating charge over almost all of the company's assets. In addition, the directors of Exe Ltd have been required to personally guarantee the overdraft.

 

Which of the following is correct? 

(i) The directors could face bankruptcy if they are called upon to honour the guarantee.

(ii) In this case the directors do not enjoy limited liability as they are liable on the guarantee if the company cannot pay.

(iii) The directors could only be required to honor the guarantee if the company's assets proved insufficient to meet the overdraft.

Which of the following is INCORRECT?

You work for a company that designs and manufactures children's toys. Which of the following is NOT an example of social responsibility that your company might choose to address?

Working late one evening, you see a colleague copying information on to series of CD Roms. He tells you that software is too expensive for him to afford for his home computer but that he needs the software for his own personal use and in case he might take work home at some point. Is this an ethical issue and why?

Which ONE of the following requires the approval of a simple majority of all the company’s shareholders who are entitled to vote?

Which of the following is correct?

X was employed by Bee Ltd as its senior design consultant. X contracted with Bee Ltd that, when his employment with the company ceased, he would not act in competition with it or solicit its customers. After X left Bee Ltd, he registered a company called Cee Ltd which immediately began working in competition with Bee Ltd and soliciting its customers. Bee Ltd complained to X about this conduct, but X stated that, as the work was being undertaken by Cee Ltd, a separate legal entity, X had not acted in breach of the agreement with Bee Ltd.

 

Which of the following statements is correct?           

The IFAC has eight main drivers of sustainable corporate success. Which of the following are included in the eight mam drivers?

1, Innovation and adaptability

2. Effective leadership and strategy.

3. Board control and responsibility

On the basis of the National Minimum Wages Act 1998, what is the age range for the lowest national minimum wage entitlement?

Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?

 

"A professional accountant should be straightforward and honest in all professional and business relationships"

According to CIMA, which TWO of the following are responsibilities of a professional accountant?

Tee Ltd placed some computers in its shop window with a notice which reaD. "Special offer. Internet-ready computers for sale at £400."

 

Which of the following is correct? 

(i) The notice amounts to an invitation to treat.

(ii) When a customer called in to the shop and offered £350 for one of the computers, he had made a counter offer.

(iii) The shop is obliged to sell a computer to anyone who can pay the price.

Which ONE of the following is NOT an essential element of the tort of negligence?

In the UK the body responsible for establishing ethical standards relating to the independence, objectivity and integrity of those providing assurance services is:

You are at a conference. The finance director of one of your competitors is boasting about top secret plans that she says will give her company market dominance. As she walks into a conference session, she accidently drops a folder marked "private and confidential". No one else notices and you are left alone in the room with the folder. Which of the following would be an ethical course of action and why?

Which of the following statements is correct in relation to equity?

 (i) Equity was developed by the Court of Chancery

(ii) Equitable maxims were developed by lawyers

(iii) In the event of a conflict between equity and the common law, equity prevails  

Which of the following is CORRECT in relation to a Limited Liability Partnership (“LLP”)?

(i) An LLP is formed by registration with the Registrar of Companies

(ii) Unlike the articles of a company the internal rules of an LLP are not available for public inspection

(iii) An LLP is liable to pay corporation tax on its profits

B is employed by Zed plc and has suffered an occupational injury.

 

Which of the following is correct?

 

Zed plc may be liable to B for:

i. breach of an implied term in B's contract of employment

ii. breach of the duty to take care in the tort of negligence

iii. breach of statutory duty

Which of the following would be regarded as an issue of shares for an improper purpose?

(i) An issue of shares to enable the directors to maintain control of the board.

(ii) An issue of shares to prevent a take-over bid.

(iii) An issue of shares in return for a non-cash consideration. 

Which of the following is incorrect?

Which of the following does a professional accountant NOT have a duty to stay up to date on?

Which of the following type of committee is NOT required by the UK Combined Code?