Free BA4 – Fundamentals of Ethics, Corporate Governance and Business Law Exam CIMAPRA17-BA4-1 Exam Practice Test

Which of the following groups is a financial as opposed to a non-financial stakeholder of a company?

• Journalists
• Local charities
• Employees
• Competitors

Which of the following is correct in relation to Section 14 of the Sale of Goods Act 1979 which implies a term into contracts for the sale of goods that the goods supplied will be of “satisfactory quality.”

• A breach of Section 14 enables the innocent buyer to cancel the contract and claim damages.
• The parties to a contract for the sale of goods can choose to exclude Section 14.
• Section 14 applies to contracts for the sale of new goods only and does not apply to sales of second-hand goods
• (i) only
• (i) and (ii) only
• (ii) only
• (ii) and (iii) only

AB Ltd contracted to deliver two desks and three filing cabinets to CD Ltd. On the day when delivery was due to take place AB Ltd did not have a vehicle with sufficient capacity to hold all the goods. As a result AB Ltd delivered the two desks onlyWhich of the following is correct?

• The contract between AB Ltd and CD Ltd is frustrated.
• CD Ltd is legally entitled to refuse delivery of the desks
• The failure to deliver the filing cabinets is a breach of a warranty which entitles CD Ltd to claim damages
• The delivery of the desks amounts to substantial performance of the contract and CD Ltd is obliged to pay the contract price less an amount for the defects in performance

Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?"A professional accountant should comply with relevant laws and regulations and should avoid any action that discredits the profession"

• Integrity
• Objectivity
• Professional competence and due care
• Professional behavior

You always take the time to be polite to colleagues and listen to the opinions of others, even if you might disagree with their views. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

• Responsibility
• Reliability
• Respect
• Courtesy

Tom is a director of XYZ Ltd. The company is considering purchasing Tom's business for £200,000. Which of the following is incorrect?

• Tom cannot contract with XYZ Ltd as he would be placing himself in a conflict of interest and duty situation.
• Tom must formally disclose his interest in the contract to the board.
• The shareholders may approve the arrangement by passing an ordinary resolution.
• The purchase consideration may be in the form of cash or shares.

A business that has an internal ethical code is likely to experience which of the following benefits? Select ALL that apply.

• Better communication with staff
• Consistency of conduct
• Reduced risk
• Improved reputation
• Competitive advantage

Which of the following statements is correct?

• In the event of a conflict between English Law and European Law, English Law prevails.
• The Supreme Court is the highest court in the United Kingdom.
• The High Court is bound by a ratio decidendi of the Supreme Court.
• (ii) and (iii) only
• (i) and (iii) only
• (i), (ii) and (iii).
• (i) and (ii) only

Which of the following is incorrect in relation to the remedy of liquidated damages?

• A liquidated damages clause will be void if it amounts to a penalty clause.
• A liquidated damages clause will apply where it is a genuine attempt to pre-estimate the loss caused by a breach of contract.
• If a liquidated damages clause is held to be void, the innocent party cannot claim on a quantum meruit basis.
• If a liquidated damages clause is found to be reasonable, the amount specified must be claimed, even if it is less than the actual loss caused by the breach.

Which of the following would NOT violate the CIMA Code of Ethics fundamental principle of confidentiality?

• Disclosing publicly available information
• Using sensitive information gained with a previous employer for the advantage of a new employer
• Not disclosing information if required to do so by law
• Disclosing confidential information to third parties