CIMA BA4 : Fundamentals of Ethics - Corporate Governance and Business Law

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CIMA BA4 Exam Syllabus Topics:

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

1. Abel has just completed an audit on a large law firm. He has decided to issue a modified audit report with a qualified opinion due to the issues he discovered regarding misstatements in the company's financial records.
Why has Abel decided to issue the report with a qualified opinion as opposed a different kind?

A) Because he has come to the conclusion that the misstatements aren't an issue, but should be noted in the report.
B) Because he was unable to find enough suitable evidence to determine whether or not the misstatements were both material and pervasive.
C) Because he has found the misstatements to be both material and pervasive.
D) Because even though he has discovered material statements, he has not deemed them to be pervasive.

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

3. Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?
"A professional accountant should comply with the relevant laws and regulations and should avoid any action that discredits the profession"

A) Professional competence and due care
B) Professional behavior
C) Objectivity
D) Integrity

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

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

5. A advertised her motor car for sale in a local newspaper at a price of £5,000.
Which of the following is correct?

A) If B telephones A and asks if he can pay by installments, his call would amount to a counter offer.
B) If C telephones A and offers £4,500, she has made a counter offer.
C) The advertisement is an invitation to treat.
D) The advertisement constitutes an offer which may be accepted by anyone who can pay the price.

Solutions: