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

1. A professional accountant's social responsibility relates to which TWO of the following?

A) Playing a role within global, local, professional or other communities
B) Fulfilling public duty
C) Seeking to maximize a company's shareholder return on investment
D) Acting in the interests of one's employer

2. J is employed as management accountant of a large retailer. Jo has been invited to take a holiday 'all expenses paid' at a villa owned by the managing director of a supplier organization. If J accepts the invitation, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?

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

3. How might a company ensure that the roles and responsibilities of its board and management are made clear and publicly known?

A) Highlight this information during its AGM.
B) Ensure such details are included in the its annual report.
C) Ensure it has an audit committee, remuneration committee and a nominations committee.
D) Adhere to the principles outlined in the Sarbanes-Oxley Act.

4. There are several different schools of ethics. Which of the following best represents the ethical approach adopted by the accountancy profession?

A) The guiding principle of conduct should be the greatest happiness or benefit of the greatest number.
B) People have a duty to comply with a set of universal principles that apply irrespective of the consequences of their actions
C) Virtues such as charity and justice are dispositions to act in ways that benefit both the person possessing them, and society as a whole
D) People should act in their own best interests and an action is only right if it benefits the individual undertaking that action

5. Advocacy threats to compliance with fundamental principles are described as threats that may occur

A) as a result of the financial or other interests of a professional accountant or of an immediate or close family member
B) when, because of a close relationship, a professional accountant becomes too sympathetic to the interests of others
C) when a professional accountant promotes a position or opinion to the point that subsequent objectivity may be compromised
D) when a previous judgment needs to be re-evaluated by the professional accountant responsible for that judgment

Solutions: