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

1. Which of the following is normally not an implied term of a contract of employment?

A) The duty to provide work.
B) The duty to obey the employer's lawful instructions.
C) The duty not to disclose confidential information.
D) The duty to maintain mutual trust and confidence.

2. Company F is a new business that prides itself on being green and ethical. It uses renewable energy to run its factories, abides by all the rules and regulations and regularly donates money to sustainable development charities around the world, despite occasionally being unable to fully pay its workers.
Why is Company F in violation of Carroll's CSR pyramid?

A) Because it is not profitable.
B) Because it should be donating to charities based in their own country.
C) It is not in violation of Carroll's pyramid.
D) Because using renewable energy to run factories generally isn't advised as it can be unreliable.

3. Which of the following is INCORRECT regarding the differences between a general partnership and a company limited by shares?
(i) Both a partnership and a company are formed by registration with the Registrar of Companies.
(ii) All partners are agents of the firm and all directors are agents of the company.
(iii) All partners are fully liable for the firm's debts and the company is fully liable for its own debts.

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

4. Who is bound by the articles of association?

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

5. Which of the following statements refer to the remuneration committee? Select ALL that apply.

A) Has a responsibility to attract, retain and motivate directors.
B) Staffed exclusively by NEDs.
C) Makes decisions regarding the appointment of new directors.
D) Makes decisions regarding the payment of directors.
E) Has a responsibility to monitor and review the effectiveness of the internal audit function.
F) Makes decisions regarding the appointment, re-appointment and removal of the external auditor.

Solutions: