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

1. 'Remuneration' is one of the main principles in the Corporate Governance Code. Which of the following is NOT best practice under the 'Remuneration' principle?

A) The board of directors are able to set the remuneration of non-executive directors
B) There should be a formal and transparent procedure for developing policy on executive remuneration
C) Remuneration should be structured in order to link a significant proportion of the rewards to corporate and individual performance
D) Remuneration should be sufficient to attract, retain and motivate directors of the quality required to run the company successfully, but should not be excessive

2. In furtherance of their duty to promote the success of the company under Section 172 of the Companies Act 2006, the directors are required to take account of amongst others, the company and its members, employees and suppliers.
Which of the following can enforce this duty against the directors?

A) The suppliers
B) The employees
C) The members
D) The company

3. In the UK, the body responsible for reviewing the regulatory activities of the professional accountancy bodies is:

A) The Financial Review Board
B) The International Federation of Accountants
C) The Financial Reporting Council
D) The Professional Oversight Board for Accountancy

4. Which of the following is NOT an essential element of a valid simple contract?

A) Agreement.
B) Written terms.
C) Intention to create legal relations.
D) Consideration.

5. The code of ethics of the professional body to which M belongs is very clear about the importance of non-discrimination on the grounds of race, gender, sexual orientation and religion. But, because of her particular religious convictions, M believes that homosexuality is wrong. This is an example of a tension between:

A) Personal and corporate values
B) Personal and professional values
C) Societal and professional values
D) Corporate and professional values

Solutions: