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

The board of Wye Ltd has resolved to issue £100,000 of redeemable preference shares. Which of the following is correct?

• The company must have issued at least one non-redeemable share.
• The company must redeem them at not less than their nominal value.
• A holder of a redeemable share must also hold at least one ordinary share in the company.
• (i) only
• (i) and (ii) only
• (ii) and (iii) only
• (i), (ii) and (iii)

In relation to the company secretary which of the following is correct?

• A public company must have a company secretary who is appropriately qualified
• A member of CIMA is qualified to act as a company secretary
• A private company may choose to have a company secretary and if so he/she must be appropriately qualified
• (i) only
• (i) and (ii) only
• (ii) only
• (i), (ii) and (iii)

In relation to conditions and warranties, which of the following statements is correct?

• A breach of a condition entitles the party not in breach to claim damages only
• To be effective a condition must be expressed in the contract
• A warranty may be implied into a contract on the basis of a trade custom.
• A breach of a warranty entitles the party not in breach to cancel the contract

Which of the following countries does not have a written constitution?

• The United Kingdom
• Poland
• Germany
• Italy

Which of the following are listed among the IFAC's drivers for sustainable organisational success? Select ALL that apply.

• Customer and stakeholder focus
• Effective leadership and strategy
• Integrated governance, risk and control
• Innovation and adaptability
• Financial management
• People and talent management
• Operational excellence
• Effective and transparent communication
• Rights and equitable treatment of shareholders
• Interests of other stakeholders
• Role and responsibilities of the board
• Integrity and ethical behaviour
• Disclosure and transparency

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?

• Nothing
• Advise a director of the company
• Ask for confirmation in writing from the manager
• Bring the matter to the attention of the police
• Ask for advice from the company's external auditors

According to the CIMA Code of Ethics, a professional accountant should not be associated with reports, returns, communications or other information where they believe that the information:

• Contains a materially false or misleading statement
• Contains statements or information furnished recklessly
• Omits or obscures information required to be included where such omission or obscurity would be misleading
• All of the above

Which of the following statements is correct?

• An employer is vicariously liable for all acts of his employees committed in the course of their employment.
• An employer is vicariously liable for torts committed by his employees in the course of their employment.
• An employer is vicariously liable for all torts committed by employees and independent contractors.
• An employer is vicariously liable for all the acts committed by employees and independent contractors.

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

Which of the following is correct?

• Purchasing a "shelf company" enables business to commence more quickly.
• It is generally cheaper to purchase a "shelf company", than to arrange for a solicitor or accountant to register a new company.
• Incorporating a company by registration enables the company's documents to be drafted to the particular needs of the incorporators.
• (i) and (ii) only
• (ii) and (iii) only
• (i) and (iii) only
• (i), (ii) and (iii)