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CIMA BA4 real answers - Fundamentals of Ethics - Corporate Governance and Business Law

BA4
  • Exam Code: BA4
  • Exam Name: Fundamentals of Ethics - Corporate Governance and Business Law
  • Updated: Jul 12, 2025
  • Q & A: 660 Questions and Answers
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CIMA Fundamentals of Ethics - Corporate Governance and Business Law Sample Questions:

1. B is employed by Zed plc and has suffered an occupational injury.
Which of the following is correct?
Zed plc may be liable to B for:
i. breach of an implied term in B's contract of employment
ii. breach of the duty to take care in the tort of negligence
iii. breach of statutory duty

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


2. An independent audit is important to readers of financial statements because it

A) objectively examines and reports on management's financial statements
B) assures the readers of financial statements that any fraudulent activity has been corrected
C) measures and communicates the data included in financial statements
D) confirms the accuracy of management's financial representations.


3. Agency theory is often cited as an explanation for the development of corporate governance Which TWO of the following statements are correct?

A) Agency theory defines the problems that arise from the dependency of an organisation on resources
B) Agency theory assumes that the goals of the managers of the company are the same as the owners of the company
C) Agency theory explains the issues which arise from the separation between the owners of the company and those who control it
D) Agency theory requires that the managers of the company act in the interests of the owners of the company
E) Agency theory assumes that the goals of the managers of the company are different from the owners of the company


4. Your company's marketing department produces a corporate brochure where, although it uses data that is accurate, the conclusions that it draws are somewhat misleading. Is this an ethical issue and why?

A) Yes - incompetence is an ethical issue
B) Yes - misrepresenting information is an ethical issue
C) No - all marketing uses an element of 'spin' or misrepresentation, so there is nothing wrong with this
D) No - as long as the data is correct


5. Wye Ltd has an issued share capital of 500,000 ordinary 20p shares. The company wishes to consolidate its shares into 100,000 ordinary £1 shares. Which of the following is CORRECT?
(i) Wye Ltd must have the power to consolidate its share capital in its articles of association (ii) Consolidation is lawful for a private company but not for a public company (iii) The consolidation must be authorized by the shareholders of Wye Ltd passing an ordinary resolution

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


Solutions:

Question # 1
Answer: C
Question # 2
Answer: A
Question # 3
Answer: C,E
Question # 4
Answer: B
Question # 5
Answer: A

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