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

1. Which of the following governs all public sector employees?

A) The Seven Principles of Public Sector Participation
B) The Seven Principles of Public Enterprise
C) The Seven Principles of Public Private Partnership
D) The Seven Principles of Public Life

2. Which of the following is NOT an obligation imposed on all professional accountants by the principle of objectivity?
Not to compromise their professional or business judgment because of:

A) Conflict of interest
B) Honesty
C) Bias
D) The undue influence of others

3. In the event of a conflict between European Law and French Law which will prevail?

A) French private law
B) French public law
C) The French Code Civile
D) European law

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

5. Which of the following is incorrect in relation to remedies for breach of contract?

A) Equitable remedies are only available if the common law remedy of damages is inadequate.
B) Contracting parties are bound by liquidated damages clauses so long as they are genuine attempts to pre-estimate the loss caused by a breach of contract.
C) A victim of a breach of contract may fail to recover damages if he has failed to mitigate his loss.
D) Damages cannot be recovered for losses over and above those arising naturally from the breach.

Solutions: