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

1. In furtherance of their duty to promote the success of the company under Section 172 of the Companies Act 2006, the directors are required to take account of amongst others, the company and its members, employees and suppliers.
Which of the following can enforce this duty against the directors?

A) The members
B) The employees
C) The company
D) The suppliers

2. 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?

A) Nothing
B) Advise a director of the company
C) Ask for confirmation in writing from the manager
D) Ask for advice from the company's external auditors
E) Bring the matter to the attention of the police

3. Which of the following need NOT be submitted in order to register a private company limited by shares?
(i) Articles of association
(ii) The name of the company secretary
(iii) A statement of share capital

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

4. S is management accountant for a small construction company. The company's financial year is due to end in a few weeks. The company has a number of large construction projects, one of which is behind schedule. One of the directors of the company has asked S to raise an invoice for a progress payment that is due on completion of the next phase of the contract. S knows that this phase will not be complete until after the year end, but the director says that the client needs the invoice now, to allow them to process it in time for payment when the phase is complete.
Which THREE of the following would it be appropriate for S to do?

A) Ask for confirmation in writing from the director
B) Bring the matter to the attention of the managing director
C) Ask for advice from the company's external auditors
D) Do as requested
E) Refuse
F) Challenge the request

5. In the UK, the body responsible for reviewing the regulatory activities of the professional accountancy bodies is:

A) The Financial Reporting Council
B) The Professional Oversight Board for Accountancy
C) The Financial Review Board
D) The International Federation of Accountants

Solutions: