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

1. Which of the following is INCORRECT in relation to the European Commission?

A) The Commission is the executive arm of the European Union.
B) The Commission represents the European Union in any trade negotiations with states which are not members of the European Union.
C) The Commission is made of independent Commissioners whose role is to further the interests of the Member States which they represent.
D) The Commission has a duty to ensure the treaties and law are upheld, potentially by taking Member States or other institutions to the European Court of Justice.

2. Which THREE of the following represent the impact of one of the seven principles of public life on accountants?
When awarding contracts accountants should ensure that this is based upon objective measures of comparative merit.

A) Accountants should promote and support the seven principles in public life through leadership and example.
B) Accountants should act solely in the public interest and should therefore not make a profit from their professional advice to clients.
C) Accountants should be publicly open about the reasons for their decisions within the companies they work for.
D) Accountants should ensure that they only restrict information about their clients when the public interest so demands it
E) Accountants should avoid any conflicts of interest in their professional conduct

3. Which TWO of the following are examples of safeguards that may increase the likelihood of identifying or deterring unethical behavior?

A) Effective, well publicized complaints systems operating by the employing organization, the profession or a regulator
B) An explicitly stated duty to report breaches of ethical requirements
C) A company policy stating that ethics is discretionary and it is for individuals to decide on their standards of behavior
D) Leadership of an organization that establishes the expectation that members of an assurance team will act solely in their employer's interest

4. In resolving an ethical dilemma, which of the following would NOT be a useful approach to take when focusing on finding an ethical solution?

A) Identifying whether the possible solutions would make you more or less popular with colleagues
B) Asking yourself whether the possible solutions are legally acceptable
C) Testing the issue against CIMA's Code of Ethics
D) Asking colleagues for their advice

5. Miss K is a newly qualified accountant working in a highly respected local accountancy firm headed by Mr R, who is a pillar of the community. One night, Miss K is at an out of town bar with friends, when she spots Mr R with Mrs E, a client of the firm. It is obvious they are having a secret affair. Is this an ethical issue?

A) Yes, Mr R is involved in a potential conflict of interest by having an affair with a client
B) Yes, as professional accountants, Miss K and Mr R should not be drinking alcohol
C) No, what Mr R and Mrs E do in their own personal time is nobody else's business
D) No, Miss K knows nothing about Mr R's private life, and may be mistaken about the affair

Solutions: