CIMA CIMAPRA17-BA4-1 Exam Questions Instant Access

Question 1

You work for an airline company and discover a series of regular payments made to a lobbying group that campaigns to allow people freedom to fly as and when they choose without being taxed for contributing to global warming. The group's website includes specific commentary that claims to 'expose the myth of global warming'. Neither your company nor the lobbying group (which describes itself as 'independent') mention the financial link between your organizations. Is this an ethical issue and why?

AYes - the lobbying group appears to be funded at least in part by your company so it is not independent and is therefore misleading people about its status

BMaybe - depending on whether the lobbying group is funded by other airlines as well as your company

CNo - companies are entitled to fund any groups that they choose, particularly if it is in their financial interest. Neither party has done anything unethical

DNo - there is unlikely to be any connection between the payments and the group's aims. After all, companies regularly fund Non-Government Organizations (NGOs) and other types of organization

Answer : A

Question 2

Which of the following is a 'financial stakeholder' of an organization?

AMedia

BEmployee

CNon-governmental organizations

DCompetitor

Answer : B

Question 3

According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards?

AThe Chairman

BThe Board

CThe Managing Director

DThe shareholders

Answer : B

Question 4

Pablo and Paula are in discussions with a potential buyer over the sale of their house. They tell the potential buyer that if they want to purchase the house for the full amount of 200,000, they'll need to send a letter that

confirms their offer by Friday. If they don't receive such a letter by then, they'll withdraw the house from the market.

Friday comes and no letter arrives. However, it turned out the potential buyer actually posted the letter on the Monday before, and it simply got lost in the post. The letter eventually turns up on the following Monday.

Baring this in mind, are Pablo and Paula legally obliged to sell their house?

AYes - Because the potential buyer sent the letter before the closing date.

BYes - The potential buyer can choose to accept Pablo and Paulo's price whenever he wants, providing that he hasn't already declined it.

CNo - Because they received the letter after the closing date they do not have to accept the potential buyer's offer.

DNo - They can decline the potential buyer's request at any time, regardless of when they received the letter.

Answer : A

Question 5

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

AThe separation of the roles of Chairman and Managing Director

BThe appointment of competent accountants in the finance function

CThe establishment of an audit committee

DThe reporting to shareholders of risks and internal controls

Answer : B

Question 6

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) only

B(i) and (ii) only

C(ii) and (iii) only

D(iii) only

Answer : D

Question 7

ABC plc has acted in breach of its health and safety obligations and this has led to a number of employees and members of the public being injured.

Which of the following is correct?

The breach could give rise to:

i. Civil claims on the part of the employees and members of the public

ii. Enforcement action by the Health and Safety Executive

iii. Criminal sanctions against ABC plc

A(i) only

B(i) and (ii) only

C(ii) and (iii) only

D(i), (ii) and (iii)

Answer : D

CIMA BA4 - Fundamentals of Ethics, Corporate Governance and Business Law CIMAPRA17-BA4-1 Exam Questions