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

1. Which of the following statements is correct?
(i) An employer may rely on information discovered after an employee's dismissal to justify a wrongful dismissal.
(ii) An employer may rely on information discovered after an employee's dismissal to justify an unfair dismissal.
(iii) An employment tribunal will take into account the employee's conduct when determining how much compensation for unfair dismissal to award.

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

2. If the IFAC Code of Ethics is in conflict with the laws of a particular country, then which of the following statements is TRUE?

A) The accountant has a public duty to question the laws of the country in question
B) The IFAC Code of Ethics takes precedence of the country's laws
C) The law takes precedence over the IFAC Code of Ethics
D) The accountant has to make his or her own decision about whether to adhere to the IFAC Code of Ethics or the law

3. In the event of a breach of contract, what is the purpose of damages?
(i) To punish the contract breaker.
(ii) To compensate the innocent party.
(iii) To ensure that the innocent party makes a profit.

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

4. Which of the following is correct?
(i) The purpose of the criminal law is to regulate behavior within society.
(ii) The purpose of the civil law is to enable injured persons to obtain a remedy against the wrongdoer.
(iii) A breach of the criminal or civil law can result in the defendant being fined.

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

5. Which of the following is incorrect?

A) A ratio decidendi of the Court of Appeal is binding on the High Court.
B) A ratio decidendi of the Supreme Court is binding on the Court of Appeal.
C) A ratio decidendi of the Supreme Court is binding on the High Court.
D) The Supreme Court is bound by a previous House of Lords ratio decidendi.

Solutions: