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

1. Which of the following would be regarded as an issue of shares for an improper purpose?
(i) An issue of shares to enable the directors to maintain control of the board.
(ii) An issue of shares to prevent a take-over bid.
(iii) An issue of shares in return for a non-cash consideration.

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

2. If a business trades as "Exe and Co (Office Furniture)" which of the following is CORRECT?
(i) The business could be owned by a partnership
(ii) The business could be owned by a sole trader
(iii) The business could be owned by a private company limited by shares

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

3. Which of the following is NOT a 'financial stakeholder' of an organization?

A) Government
B) Customer
C) Employee
D) Media

4. Which of the following is NOT one of the fundamental principles of CIMA's Code of Ethics?

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

5. What is the rule in Foss v Harbottle (1843)?

A) Where a wrong has been done to the shareholders it is the company which should sue.
B) Where a wrong has been done to the company it is the directors who should sue.
C) Where a wrong has been done to the directors it is the company which should sue.
D) Where a wrong has been done to the company it is the company which should sue.

Solutions: