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

1. B has been employed by Wye Ltd for 10 years. His contract of employment states that, if either Wye Ltd or B wishes to terminate the contract, each party must give the statutory minimum period of notice.
Which of the following statements is correct?

A) B is entitled to 1 month's notice and Wye Ltd is entitled to 10 weeks' notice.
B) Both B and Wye Ltd are entitled to 1 week's notice.
C) B is entitled to 10 weeks' notice but Wye Ltd is entitled to only 1 week's notice.
D) Both B and Wye Ltd are entitled to 10 weeks' notice.

2. According to the CIMA Code of Ethics:

A) Good ethical behavior may be above that required by the law
B) Good ethical behavior may be above that required by professional bodies
C) Good legal behavior may be above that required by ethics
D) Good professional behavior may be above that required by ethics

3. Which of the following most accurately describes obiter dicta?

A) It is a statement of law made "by the way" which is not binding on future courts which are called upon to decide a similar case.
B) It is the legal principle used by a court to decide a case.
C) It is the legal principle used by a court to decide a case which is binding upon lower courts called upon to decide a similar case.
D) It is a statement of law made "by the way" which is binding on future courts which are called upon to decide a similar case.

4. Internal audit is considered best practice but is not required by law Which of the following does NOT describe a benefit of internal audit to the board of directors?

A) The internal audit function can report back to the audit committee if controls are not as effective as they should be
B) The internal audit function can help the audit committee have confidence in the fraud prevention systems within the company
C) The internal audit function can help the audit committee to discharge their responsibilities for the ongoing monitoring of the risk in the company
D) The internal audit function can provide independent assurance of the financial policies applied to the financial statements

5. The UK Corporate Governance Code is primarily concerned with the effective control, business efficacy and accountability of the management of public listed companies for the benefit of which of the following?

A) Stakeholders
B) Shareholders
C) Investors
D) Employees

Solutions: