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CIMA BA4 Exam Syllabus Topics:

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

1. Which parties of a company form the agent/principal relationship?

A) Shareholders and the board
B) Directors and the board
C) Directors and the business
D) The board and the business
E) Shareholders and the business
F) Directors and shareholders

2. John is conducting an external audit on a biscuit factory. He wants to make sure that his audit is comprehensive and thorough. To do this, he aims to make full use of his powers and rights.
Which of the following is John allowed to do?
Select ALL that apply.

A) Ask responsible officers to produce relevant documents.
B) Actively investigate fraudulent activity.
C) Ask to be notified of any shareholder meetings.
D) Present arguments at a meeting if there is a proposal to remove the auditors.
E) Access the company's books and records.
F) Review and report on the performance of management.
G) Ask for explanations from officers of the company.

3. A, B C and D are sole directors and shareholders of EFG Company each holding 25% of the shares in the company. The articles of association of EFG Company state that "the directors cannot enter into any contract on behalf of the company exceeding $30,000 without the agreement of all the shareholders''.
B contracted on behalf of the company for $40,000 with Y Company without the agreement of the other shareholders. Which of the following is correct?
1. Y Company may enforce the contract against EFG Company
2. A, C and D may obtain an injunction to stop the contract being canted out
3. B may be liable to EFG Company for breach of duty.

A) 1,2 and 3
B) 1 and 3 only
C) 1 and 2 only
D) 1 only

4. Who is bound by the articles of association?

A) The company + Stakeholders
B) The company + Shareholders
C) Shareholders
D) Stakeholders
E) The company

5. Which of the following is correct?
(i) A decision of the Supreme Court is binding on all lower courts which are called upon to decide a case based on similar material facts.
(ii) If there is a conflict between European Law and English law, European Law prevails.
(iii) Parliament may delegate authority to the government to make law.

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

Solutions: