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The UK Corporate Governance Code is primarily concerned with the effective control, business efficacy and accountability of the management of public listed companies for the benefit of which of the following?
Being able to be trusted by others to be dependable reflects the personal quality identified by the CIMA Code of Ethics as:
The International Accounting Education Standards Board has published a document titled "Approaches to the Development and Maintenance of Professional Values, Ethics and Attitudes in Accounting Education Programs'", which provides guidance about the personal qualities needed by accountants to meet the expectations of the public
The particular qualities which it identifies are
Andrea is completing an audit on the finance department for a medium-sized company. In her report she makes note of the fact that her audit was severely limited due to her being unable to access many of the
department's documents.
Because of this and a number of other things she's discovered whilst conducting her audit, she thinks fraudulent activity might have been taking place within the department.
However, Andrea knows that it is not the business of auditors to seek out fraud.
What should she do?
Zed plc wishes to issue £500,000 of shares on terms that the holders will receive a dividend before the other shareholders and they will be bought back by the company in 12 months' time. Which of the following best describes these shares?
Which of the following statements is correct following the enactment of the Companies Act 2006?
(i) A public company must hold an annual general meeting within six months of the end of its accounting reference date.
(ii) A private company is no longer required to hold an annual general meeting.
(iii) A private company must give 21 days' notice of a general meeting.
Which of the following statements is correct?
(i) To succeed in the tort of negligence, a claimant must show that the defendant owed him a duty of care.
(ii) To succeed in the tort of negligence, the defendant must have broken a duty to take care.
(iii) To succeed in the tort of negligence, it is necessary to show that the claimant suffered loss or harm as a result of the defendant's breach of duty.
According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards?
Badger has just been offered a job after completing a series of long interviews.
Which of the following would legally form the employment contract between him and his employer:
Which of the following are situations involving familiarity threats? Select ALL that apply.
Which of the following is INCORRECT in relation to the Unfair Terms in Consumer Contracts Regulations 1999?
Which of the following causes a charge to be void?
(i) A failure to register the charge at Companies House within 21 days of its creation.
(ii) A failure to register the charge at the company's registered office.
(iii) The issue of a charge to secure borrowing which is outside the directors' authority
Decklt is a skateboard manufacturer that is ethically run and has a good reputation.
However, it has just transpired that one of their suppliers - with whom they have a good relationship with due to their cheap prices - is involved in a serious fraud case.
What should Decklt do?
Where a countries' rules protect whistleblowers. they usually only do so where there has been a "qualifying disclosure" Which of the following statements best describes the minimum level of information which a whistleblower needs to have to make a "qualifying disclosure"?
Anne was induced to enter into a contract with Benny by his negligent misrepresentation. Which of the following is correct?
(i) Anne has a remedy against Benny in the tort of negligence.
(ii) Anne has a remedy against Benny under the Misrepresentation Act 1967.
(iii) Anne has a remedy in the tort of deceit.
Which of the following increase the likelihood of having a successful ethical code? Select ALL that apply.
The Auditing Practices Board has an objective of establishing ethical standards in relation to which aspects of the work of external auditors and those providing assurance services?
A business has been registered under the name ABC Ltd. Which of the following types of business organization must this be?
Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?
You work for a chain of coffee shops who are proud of their sustainable credentials and have used their claim to recycle all of their disposable cups as part of their brand identity. An audit has revealed that staff in one region (West) are mixing these cups into normal waste and sending them to landfill in spite of the ethical code of practice of the company
Which TWO of the following might explain why the code has failed to promote the desired behavior?
T, a Sales Representative of E plc, made an appointment to see you in the hope of persuading you to place a substantial order with E plc. During your discussions, T suggested that you could qualify for a cash bonus in the event of an order being placed.
Which of the following is correct?
(i) Placing an order in these circumstances will place you in breach of your employment and professional obligations.
(ii) If the goods are what your company requires and are priced competitively, you are acting correctly in placing an order and qualifying for the cash bonus.
(iii) You have been placed in a conflict of interest situation and you should not proceed to place an order.
An internal auditor discovered evidence of a fraud earned out by an employee who worked in the accounting department. The auditor concluded that the fraud had been possible because of unsatisfactory segregation of duties in the department.
Poor segregation between which of the following duties would provide the best opportunity for this type of fraud to occur?
Your boss knows that you will always strive to deliver a project on time and on budget. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?
High profile corporate scandals in the past decade have had an effect on which of the following?
Being accountable for one's actions and decisions reflects the personal quality identified by the CIMA Code of Ethics as:
Which of the following would be regarded as an issue of shares for an improper purpose?
(i) An issue of shares to enable the directors to maintain control of the board.
(ii) An issue of shares to prevent a take-over bid.
(iii) An issue of shares in return for a non-cash consideration.
Which of the following statements is correct in relation to the "maintenance of capital" principle?
Which TWO of the following options describe safeguards that the CIMA Code of Ethics states may eliminate or reduce threats to compliance with fundamental principles to an acceptable level?
How might a company ensure that the roles and responsibilities of its board and management are made clear and publicly known?
The introduction of restrictions on how companies are permitted to advertise to children is a UK government reaction to a tension between:
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?
Which of the following is correct in relation to the memorandum of association when registering a company limited by shares?
Company A has recently been having problems matching the views of its employees to its own. Which of the following might help their situation? Select ALL that apply.
Which of the following is NOT an essential element of a valid simple contract?
Which of the following auditors would need to issue a disclaimer of opinion? Select ALL that apply.
Which THREE of the following are examples of a fraudulent action against a company?
You are happy to be held accountable for your actions and hope that others can trust and depend upon you. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?
A was disqualified from driving but continued his employment as a driver for XYZ plc. The company discovered that A had lost his driving license and immediately dismissed him without notice.
Which of the following is correct?
i. As no notice was provided A's dismissal amounts to constructive dismissal.
ii. The employer was justified in dismissing A without notice as he was unable to continue his employment.
iii. A may make a claim for wrongful dismissal as, although his dismissal was justified, he was entitled to notice.
Which of the following statements is incorrect in relation to a public company limited by shares?
In which of the following countries are employees represented at board level?
i. Germany.
ii. United States of America
iii. France.
Z Ltd intends to participate in a "substantial property transaction" with one of its directors. Which of the following is correct in relation to substantial property transactions?
(i) The value of the asset must exceed 10% of the company's net assets and be more than £5,000.
(ii) The transaction must be approved by the shareholders.
(iii) The director must disclose his interest in the transaction.
Which TWO of the following are examples of safeguards that may increase the likelihood of identifying or deterring unethical behavior?
Which ONE of the following requires the approval of a simple majority of all the company’s shareholders who are entitled to vote?
Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?
"A professional accountant should be straightforward and honest in all professional and business relationships"
Which of the following is correct?
i. In general a company can use its share capital for any reason whatsoever, as long as it ensures that there is sufficient remaining to meet the company's debts.
ii. A company must use its capital for lawful purposes.
iii. In general, a company cannot return its share capital to its members.
On 1st October X Ltd wrote to Y Ltd offering to sell a machine at a price of £5,000. The letter stated that Y Ltd must give X Ltd “notice in writing” of its acceptance of the offer by 8th October. Y Ltd posted its acceptance on 5th October and this reached X Ltd on 7th October. In the meantime X Ltd sent a letter to Y Ltd on 4th October revoking its offer, and this reached Y Ltd on 8th October.
Which of the following is correct?
Michael is conducting a social and environmental audit on a chemicals factory. Which of the following should he review?
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.
Which of the following is correct?
(i) The Court of Appeal is bound by obiter dicta of the Supreme Court.
(ii) The High Court is bound by a Supreme Court ratio decidendi.
(iii) A ratio decidendi of the Court of Appeal is binding on the High Court.
Internal audit is considered best practice but is not required by law Which of the following does NOT describe a benefit of internal audit to the board of directors?
Which of the following statements suggests that A is an employee in relation to the work he carries out for BCD Ltd?
i. He is required to provide his own tools.
ii. He is required to carry out his work personally and is not free to send a substitute.
iii. He is in receipt of pay after income tax has been deducted under PAYE.
You are the manager of the finance function of a large engineering company According to IFAC's drivers of sustainable corporate success, which of the following would be a method by which you could improve the value of your department to the company?
Which of the following is one of the fundamental principles identified in the CIMA Code of Ethics?
Which of the following types of board committee are recommended by the UK Corporate Governance Code?
(i) Nomination Committee
(ii) Audit Committee
(iii) Quality Assurance Committee
Bill is conducting an audit on a furniture manufacturer. There doesn't appear to be any major issues with the company and its finances. However, Bill has noticed that the company has adopted a new set of accounting
standards unusually early.
What should Bill do?
The fraud response is a key aspect of fraud risk management within an organisation. Which of the following does NOT describe the responsibility of key personnel within this plan?
Which of the following is one of the fundamental principles identified in the CIMA Code of Ethics?
Which of the following best describes the consequences of being found to be unethical for an individual CIMA member?
Which of the following statements are correct in relation to the purpose of the OECD principles of corporate governance?
1. The principles are regarded by OECD members as representing a common basis essential for the development of good corporate governance practice
2. The principles are intended to be a substitute for individual government's proposals for governance best practice.
3. The principles are intended for the use of OECD members only.
Which of the following is CORRECT in relation to the Sarbanes-Oxley Act passed in the United States of America in 2002?
i. The Act sought to protect investors by improving the accuracy of corporate disclosure and reporting procedures and increasing corporate openness.
ii. The Sarbanes-Oxley Act 2002 was passed in response to the high-profile Enron and WorldCom financial scandals.
iii. The Act provides that all auditors of public companies must register with the Public Company Accounting Oversight Board.
Who should check that a company's financial statements provide a true and fair view of its financial performance?
Which of the following type of committee is NOT required by the UK Combined Code?
Jimmy wants to sell his scooter, so he puts an advert on the internet with a price of £50.
He quickly gets an offer for the full amount, but then decides that he doesn't want to sell his scooter after all!
The buyer complains and threatens to report jimmy to the police.
This doesn't worry Jimmy as he knows he is not legally obliged to sell his scooter. Why is this?
A manager is consistently rude to a female employee and seems to have a low opinion of her ability, despite the fact that she is competent, works hard and is well liked by her peers. This is potentially an example of the ethical issue of:
Which of the following is correct in relation to damages?
(i) As a general rule damages for breach of contract are designed to place the innocent party in the position that he or she would have been in had the contract been carried out properly.
(ii) Damages are only available for breach of contract, if the breach caused the loss.
(iii) Damages are only available for losses arising naturally from the breach.
Which of the following are situations in which the accountant is permitted to disclose confidential information?
Select ALL that apply.
Paul has been held personally liable to contribute to the assets of P Ltd as a result of his "fraudulent trading" under Section 213 of the Insolvency Act 1986. The court is about to disqualify Paul from acting as a director. What is the maximum period for which he may be disqualified?
X, Y and Z are the only shareholders in XYZ Ltd each holding 1,000 ordinary £1 shares. X is the only director of the company. The articles of association of XYZ Ltd provide that “in the event of any proposal to dismiss a director by ordinary resolution, the votes of the director are to count 3 times.” Which ONE of the following is CORRECT?
Louis is the only director in MNO Ltd. Max, Nick and Olga each hold one third of the issued share capital of the company. Louis has proposed an amendment to the company's Articles of Association. Which of the following is correct?
You work for an airline company and discover a series of regular payments made to a lobbying group that campaigns to allow people freedom to fly as and when they choose without being taxed for contributing to global warming. The group's website includes specific commentary that claims to 'expose the myth of global warming'. Neither your company nor the lobbying group (which describes itself as 'independent') mention the financial link between your organizations. Is this an ethical issue and why?
Which of the following is presumed not to be intended to create legal relations?
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.
Which of the following is correct?
(i) A liquidated damages clause will be void if it amounts to a penalty clause.
(ii) A liquidated damages clause will apply where it is a genuine attempt to pre-estimate the loss caused by a breach of contract.
(iii) A liquidated damages clause is void if it is for an amount in excess of the actual loss caused by the breach of contract.
Alongside technical competence what, for example, should the management accountant ask themselves?
Tee Ltd placed some computers in its shop window with a notice which reaD. "Special offer. Internet-ready computers for sale at £400."
Which of the following is correct?
(i) The notice amounts to an invitation to treat.
(ii) When a customer called in to the shop and offered £350 for one of the computers, he had made a counter offer.
(iii) The shop is obliged to sell a computer to anyone who can pay the price.
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?
Being straightforward and honest in all professional and business relationships demonstrates the CIMA Code of Ethics fundamental principle of:
J is at his company's reception desk when the promotions manager of a new restaurant and bar nearby hands him a number of vouchers for cheap meals and drinks. At the promotion manager's request, J agrees to share out the vouchers among his company's employees. J does not earn much and is tempted to keep the vouchers for himself and his friends. Is this an ethical issue and why?
According to the CIMA code of ethics, if appropriate safeguards cannot be identified to address threats to compliance with fundamental principles, a professional accountant should:
Which ONE of the following is NOT contained within form IN01 which must be submitted to the Registrar of Companies in order to register a company limited by shares?
B is invited to a big tennis final by one of her clients. Afterwards there is a private party at the client's home. B has too much to drink, and the client ends up sending her home in a taxi. Which fundamental principle has B failed to live up to?
TESTED 21 Dec 2024