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

1. Cameron runs his own chain of ice cream shops. However, his business recently accrued a lot of debt due to a sharp rise in the price of milk, and he is now forced to shut the whole operation down.
Who is liable for the debt?

A) Cameron and his employees
B) No one
C) Cameron's business
D) Cameron
E) Cameron's employees

2. Mr A sent an email to Mr B offering to sell him some goods for $1.000 Mr B replied by email stating I'll buy the goods Payment will be made over the next 4 weeks." Mr B has now discovered that Mr A has sold the goods to Mr C.
Which of the following is correct?

A) Mr A was free to sell the goods to Mr C as Mr B's email amounted to a counter offer which rejected Mr A's offer
B) Mr C has intervened in the contract of Mr A and Mr B and can be forced to return the goods for the benefit of Mr B
C) Mr A has acted in breach of contract as Mr B has accepted his offer
D) Mr A was free to sell the goods to Mr C as communications by email are presumed to show that the parties did not intend to create legal relations

3. Which of the following is CORRECT?
(i) A company registered today may restrict its ability to contract by including a provision to that effect in its articles of association.
(ii) A company which was registered before the Companies Act 2006 came into force may pass a special resolution to remove its objects clause from its memorandum of association.
(iii) If the directors ignore any restriction on the company's ability to contract they may be sued for breach of duty by the company.

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

4. Which of the following statements is incorrect in relation to the revised derivative action under section
260 of the Companies Act 2006?
(i) The action may be brought by a single shareholder.
(ii) The action may be brought in relation to an act of negligence by the directors.
(iii) The action cannot be brought in respect of a proposed act by the directors.

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

5. Maintaining professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service demonstrates the CIMA Code of Ethics fundamental principle of:

A) Professional competence and due care
B) Objectivity
C) Integrity
D) Professional behavior

Solutions: