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CIMA BA4 Exam Syllabus Topics:

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

1. Section 14 of the Sale of Goods Act 1979 implies a condition into contracts for the sale of goods that the goods supplied will be of "satisfactory quality." Exe inspected and purchased a new car. After travelling only 25 miles the engine seized up due to a latent defect. The manufacturer offered to repair the car in accordance with the guarantee but Exe has demanded a full refund.
Which of the following is correct?

A) As Exe had the opportunity to inspect the car he cannot rely on Section 14 of the Sale of Goods Act
1979 and is not entitled to a full refund
B) As Exe has a manufacturers guarantee he is obliged to comply with his contract and have the car repaired
C) Exe has used the car to travel 25 miles and cannot therefore obtain a full refund of the purchase price
D) Exe is entitled to a full refund of the purchase price

2. Jo is employed as management accountant of a large retailer. Jo has been asked to dismiss one of her colleagues for 'misconduct', but she is aware that the colleague has done nothing wrong and that her employer is trying to avoid paying any redundancy settlement. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

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

3. Which of the following is an example of a safeguard created by the profession, legislation or regulation as opposed to a safeguard in the work environment?

A) Leadership of the organization which stresses the importance of compliance with the fundamental principles
B) Leadership of the organization which establishes the expectation that members of an assurance team will act in the public interest
C) Professional standards
D) An organization having documented internal policies and procedures requiring compliance with the fundamental principles

4. The board of Wye Ltd has resolved to issue £100,000 of redeemable preference shares. Which of the following is correct?
(i) The company must have issued at least one non-redeemable share.
(ii) The company must redeem them at not less than their nominal value.
(iii) A holder of a redeemable share must also hold at least one ordinary share in the company.

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

5. The body responsible for reviewing the operations of the accounting profession worldwide is:

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

Solutions: