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CIMA BA4 Exam Syllabus Topics:

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

1. Which of the following is incorrect?

A) An Act of Parliament is a superior source of law to a decision of the Supreme Court.
B) Where there is a conflict between English Law and European Law, European Law prevails.
C) Where there is a conflict between equity and the common law, the common law prevails.
D) A decision of the Supreme Court is a superior source of law to a decision of the High Court.

2. Which THREE of the following are characteristics of Limited Liability Partnerships ("LLPs")?

A) An LLPs partners are jointly and severally liable for the debts of the LLP
B) LLPs are usually created by formal registration under statute
C) LLPs have no perpetual succession
D) LLPs can enter into contracts in their own name
E) LLPs can hold property in their own name

3. 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.

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

4. You work for a manufacturing company and are told that one of the line managers made a genuine mistake that led to the discharge of waste material into a local river. Your managing director says that the company cannot afford a large fine and demands that no one reports the waste spillage or mentions it again. Is this an ethical issue and why?

A) Yes - the manager who created the spill has behaved unethically and should be disciplined
B) Yes - but only if the waste causes damage to the local environment
C) Yes - the company has a duty to report something that might breach environmental legislation and could cause environmental damage
D) No - the leak was a mistake, so this is not an ethical issue

5. Which of the following is INCORRECT in relation to the board of directors of a private company limited by shares?

A) If there are an equal number of votes for and against a proposal before the board the negative views prevail and the proposed resolution is defeated
B) The board cannot delegate its authority
C) The board may reach a decision by written resolution
D) The board reaches its decisions by majority vote

Solutions: