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

1. Which of the following is presumed to be intended to create legal relations?

A) A commercial transaction.
B) A domestic arrangement.
C) A social arrangement.
D) A promise by a father to make a gift to his son.

2. Which parties of a company form the agent/principal relationship?

A) Shareholders and the board
B) Directors and the business
C) Directors and shareholders
D) Directors and the board
E) The board and the business
F) Shareholders and the business

3. Which of the following is NOT one of the fundamental principles of CIMA's Code of Ethics?

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

4. Which of the following contracts might be specifically enforceable?

A) D has contracted to purchase a number of tins of fruit for her business but the seller has now stated that he no longer wishes to proceed with the contract.
B) E has contracted to sing at a concert organized by F, but E has withdrawn as he has received a more lucrative offer from G.
C) A has contracted to sell his house to B but has changed his mind and no longer wishes to sell it.
D) C has contracted to buy a new Ford motor car but the garage is now refusing to honor the contract.

5. The Remuneration Committee is recognised as a board sub-committee under the Corporate Governance Code Which of the following are objectives of the Remuneration Committee?
1. The Committee should be, and should be seen to be, independent with access to its own external advice or consultants
2 The Committee is required to establish and agree pension provision for all board members
3. The Committee's reporting is clear, concise and gives the reader of the annual report a bird's eye view of policy payments and the rationale behind them

A) 1 only
B) 1 and 3 only
C) 2 only
D) 2 and 3 only

Solutions: