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

1. Matty dreams of owning his own business but can't be bothered to follow the steps involved in setting one up.
What should he do?

A) Purchase an off the shelf company.
B) Walk away from his dream - the only way he can own his own business is by following the steps involved in setting one up.
C) Set one up anyway but only complete the most important steps.
D) Become a sole trader.

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

A) Integrated governance, risk and control
B) People and talent management
C) Interests of other stakeholders
D) Operational excellence
E) Financial management
F) Customer and stakeholder focus
G) Rights and equitable treatment of shareholders
H) Disclosure and transparency
I) Innovation and adaptability
J) Effective and transparent communication
K) Role and responsibilities of the board
L) Effective leadership and strategy
M) Integrity and ethical behaviour

3. B is a director and shareholder in Cee Ltd. Which ONE of the following is INCORRECT?

A) The company must be given 28 days notice of any proposed resolution to dismiss B.
B) B may be dismissed at any time by an ordinary resolution of the shareholders.
C) B cannot vote as a shareholder in any meeting called to dismiss him as a director.
D) B is entitled to speak at the meeting called to consider the proposal to dismiss him.

4. Which of the following is NOT an advantage of establishing a company by purchasing "off the shelf"?
(i) The company is already registered so that in general business may be commenced more quickly.
(ii) The purchase off the shelf company can be cheaper than registration of a new company.
(iii) The articles of association are tailor-made to the requirements of the purchaser.

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

5. 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) Exe is entitled to a full refund of the purchase price
B) 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
C) Exe has used the car to travel 25 miles and cannot therefore obtain a full refund of the purchase price
D) As Exe has a manufacturers guarantee he is obliged to comply with his contract and have the car repaired

Solutions: