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

1. Which of the following is NOT one of the 'seven principles of public life', as defined by the Committee of Standards in Public Life?

A) Confidence
B) Openness
C) Integrity
D) Objectivity

2. Which of the following statements are part of CIMA's definition of professional behavior?Please select the TWO statements that apply.

A) Avoid any action that discredits the profession
B) Compliance with laws and regulations
C) Avoid any action that discredits one's employer or client
D) Compliance with guidelines and standards

3. Which of the following contracts might be specifically enforceable?

A) C has contracted to buy a new Ford motor car but the garage is now refusing to honor the contract.
B) A has contracted to sell his house to B but has changed his mind and no longer wishes to sell it.
C) D has contracted to purchase a number of tins of fruit for her business but the seller has now stated that he no longer wishes to proceed with the contract.
D) E has contracted to sing at a concert organized by F, but E has withdrawn as he has received a more lucrative offer from G.

4. Which of the following is correct in relation to damages?
(i) The victim of a breach of contract may claim damages in respect of losses caused by the breach which were within the contemplation of the contract breaker.
(ii) As a general rule damages cannot be claimed for annoyance and inconvenience caused by the breach of contract.
(iii) Where there is a breach of contract, damages are available to the innocent party as of right.

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

5. Which ONE of the following in INCORRECT in relation to a Limited Liability Partnership ("LLP")?

A) In return for Limited liability, an LLP, like a company, is required to submit an annual return.
B) Outsiders contract with the LLP and not with the partners, just as outsiders would contract with the company and not the directors or shareholders of the company.
C) An LLP must have "designated members" which are the LLP equivalent of the board of directors of a private company.
D) An LLP, like a company limited by shares, is a separate legal entity.

Solutions: