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

1. The code of ethics of the professional body to which M belongs is very clear about the importance of non-discrimination on the grounds of race, gender, sexual orientation and religion. But, because of her particular religious convictions, M believes that homosexuality is wrong. This is an example of a tension between:

A) Corporate and professional values
B) Societal and professional values
C) Personal and corporate values
D) Personal and professional values

2. SuperSole is a large shoe company that sells its products all over the world. It has many factories and stores in many different countries, and its yearly revenues often exceed £100 million. The company is also listen on the stock exchange.
Should SuperSole have its own internal auditing department?

A) No - All companies should be externally audited.
B) Yes - All companies should have their own internal auditing department.
C) Yes - Its large size and complexity increases the need for an internal auditing department.
D) No - Only small companies need an internal auditing department.

3. 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.

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

4. In relation to business names which of the following is CORRECT?
(i) Any business may trade under a business name.
(ii) If a business name is used the name of the owner of the business must be disclosed.
(iii) The business name of a private limited company must end with the word "Limited" or "Ltd".

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

5. The holders of a certain minimum percentage of a company's issued share capital are entitled to require the company to circulate a written statement to those entitled to receive notice of the next annual general meeting. What is that minimum percentage?

A) 10%.
B) 20%.
C) 5%.
D) 15%.

Solutions: