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

1. Regarding auditor remuneration, a self-interest threat to professional competence and due care is created if

A) a gift from a client is accepted
B) a professional accountant in public practice solicits new work through advertising or other forms of marketing
C) the competitive fee quoted did not recognize the complexity of the assignment
D) the auditor accepts a referral of a new client from an existing client

2. The chief executive of a transnational corporation states on her curriculum vitae that she has an MBA which she does not in fact have. Is this an ethical issue and why?

A) No - everyone lies on their CV
B) Maybe - depending on whether the lack of an MBA would mean that she is not competent to do her job
C) Maybe - depending on whether anyone finds out or not
D) Yes - lying is an ethical issue and casts doubt on the integrity of the individual

3. The Global Reporting Initiative (GRI) has produced Sustamability Reporting Guidelines, setting out categories and aspects which should be addressed through sustainable reporting.
Place the GRI categories next to the appropriate aspect of sustamability below.

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

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

5. Which of the following is correct in relation to financial assistance for the purchase of its own shares provided by a private company?

A) The directors may be fined if they allow the company to provide financial assistance
B) In general the existing prohibition has been removed for private companies
C) Financial assistance cannot be used where a majority shareholder is retiring
D) Financial assistance is a criminal offence on the part of the company

Solutions: