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Which of the following is NOT an advantage of establishing a company by purchasing “off the shelf”?
(i) The company is already registered so that in general business may be commenced more quickly.
(ii) The purchase off the shelf company can be cheaper than registration of a new company.
(iii) The articles of association are tailor-made to the requirements of the purchaser.
Which ONE of the following provides an example of circumstances that may create self-review threats for a professional accountant in public practice?
High profile corporate scandals in the past decade have had an effect on which of the following?
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?
Which of the following is INCORRECT in relation to Shari'ah law?
i. Shari'ah law is intended to provide for a person's spiritual well-being but is not concerned with secular matters.
ii. The Sunnah is one of the primary sources of Shar'iah law.
iii. The salat (daily prayers) is one of the Five Pillars of Islam.
Which of the following correctly describes the circumstances in which directors may be held liable to contribute to the assets of insolvent companies in respect of "wrongful trading"?
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"?
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.
How does CIMA support its members in their continual personal improvement?
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.
Which of the following statements reflects the leadership principles of corporate governance on board behavior?
As a member of the audit team of a large company, J has discovered that one of his close friends is in a part of the business which is going to be sold off, and his friend is likely to face redundancy. What should he do?
Maintaining professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service demonstrates the CIMA Code of Ethics fundamental principle of:
Which of the following is NOT one of the fundamental principles of CIMA's Code of Ethics?
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?
C recently purchased some goods at an auction sale. Which of the following is correct?
(i) The contract was concluded by the fall of the Auctioneer's hammer.
(ii) The Auctioneer's call for bids was an invitation to treat.
(iii) Once the bidding had started, the Auctioneer was unable to withdraw the goods from the sale.
In which THREE of the following situations might professional accountants be required or permitted to disclose confidential information relating to their employer?
Which of the following are correct in relation to supervisory and management boards of directors?
1 A supervisory board reports to the mangament board in respect of business policy and future strategy
2 A management board is usually made up entirely of executive directors
3 A supervisory board includes employee representatives.
The introduction of restrictions on how companies are permitted to advertise to children is a UK government reaction to a tension between:
Which of the following statements would amount to indirect discrimination in the workplace?
B has been employed by Wye Ltd for 10 years. His contract of employment states that, if either Wye Ltd or B wishes to terminate the contract, each party must give the statutory minimum period of notice.
Which of the following statements is correct?
An investigation has been launched against Company G, a supermarket, after suspicions were raised about its treatment of certain employees.
It was later found that Company G were guilty of direct discrimination.
Which of the following are the ways in which Company G were found to be directly discriminating?
Select ALL that apply.
CIMA's Code of Ethics would be violated if a professional accountant accepted a fee for work which is:
What is the legal meaning of the word “simple” in the expression “valid simple contract”?
Jo is employed as management accountant of a large retailer. Jo has been asked to make a payment to a bogus supplier that she believes would constitute money laundering. If Jo accepts the request, which of the following 'fundamental principles' of CIMA's Code of Ethics will be compromised?
Which of the following is incorrect in relation to shareholder meetings held by a public company?
lohn works as a management accountant for a law firm. He only got the job because he lied about his qualifications: he told the interviewers that he the required accountancy qualifications to do the job when he actually
didn't.
Now John's boss has found that John lied during the interview. Which of the following will almost certainly happen as a result?
Select ALL that apply.
SuperSole is a large shoe company that sells its products all over the world. It has many factories and stores in many different countries, and its yearly revenues often exceed £100 million. The company is also listen on
the stock exchange.
Should SuperSole have its own internal auditing department?
Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?
Which of the following might a company experience if they were to implement internal control measures?
Select ALL that apply.
X is in the process of setting up a private company limited by shares X is considering including certain provisions in the articles of association. Which of the following provisions would be enforceable by and against the company?
1 Dividend rights of the members
2. Terms relating to bonuses of directors
3. Payment terms of suppliers.
Zed Ltd was incorporated in 2010 and has chosen to use the standard Model Articles of Association. The company is considering appointing Max as a director of the company.
Which of the following is incorrect?
(i) Max cannot be a director of the company unless he holds shares in the company.
(ii) Max cannot be a director of the company if he is an undischarged bankrupt.
(iii) Max cannot be a director of the company if he is subject to a disqualification order.
A company's board of directors is faced with an ethical dilemma. The directors decide to adopt a utilitarian approach to coming up with a solution Therefore, they will take action based on which of the following approaches?
Which of the following destroys the original offer and puts another in its place?
While working as an accountant, you are asked to overlook certain irregularities in your company's accounts. This is likely to result in tensions described by which TWO of the following four options:
Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?
You work for a construction company. Which of the following corporate issues is NOT related to ethics or social responsibility?
Which of the following identifies civil as opposed to criminal proceedings?
i. The case was heard by the Magistrates Court.
ii. The case was brought by a claimant.
iii. The case was proved on the balance of probabilities.
In which of the following countries are employees represented at board level?
i. Germany.
ii. United States of America
iii. France.
Which of the following describes the aim of corporate governance initiatives?
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
Which of the following is incorrect?
(i) Legal title cannot pass on a contract induced by misrepresentation.
(ii) Misrepresentation renders a contract voidable.
(iii) A victim of negligent misrepresentation may seek rescission and damages.
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.
S is assistant management accountant for a large telecommunications company. S has become aware that the company is offering different levels of discount to different corporate customers. S is concerned that this is unethical, so she mentioned it to the Finance Director during her most recent appraisal. The Director seemed amused at S's concern, and said that such a situation was 'perfectly normal'.
Which ONE of the following would it be appropriate for S to do?
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?
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.
Lotl is a well-known supermarket chain that has recently come under fire for not encouraging diversity within the organisation.
Because of this, it has been making efforts to make the business more diverse.
Which of the following are ways Lotl might do this?
Select ALL that apply.
The body responsible for reviewing the operations of the accounting profession worldwide is:
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 TWO of the following are NOT directly relevant to a system of professional ethics?
Which of the following best describes "independence of mind" as referred to in CIMA's Code of Ethics
ABC Accountants has taken out an advert in its local paper to promote its services. Mr B, an account manager, is uncomfortable, as the advert says that ABC is expert in charitable tax issues, and he knows that none of the partners have that expertise. However, Mr B does not want to be thought of as a 'trouble maker' by bringing the matter up with his manager. Which TWO things should Mr B do?
Section 2 of the Health and Safety at Work Act 1974 provides that: “It shall be the duty of every employer to ensure, so far as is reasonably practicable, the health, safety and welfare at work of all his employees.”
Which of the following is correct?
A breach of this duty gives rise to
i. a civil action
ii. a tortuous action.
iii. a criminal offence.
Which of the 'fundamental principles' of CIMA's Code of Ethics is defined as follows?
"A professional accountant should act diligently and in accordance with applicable technical and professional standards"
B was an employee of Exe plc but his line manager made it practically impossible for him to continue his employment. B resigned without giving Exe plc any notice as required by his contract of employment. Which of the following is correct?
After the Companies Act 2006, which of the following is correct in relation to a reduction of capital by a public company?
(i) If the reduction results in the company no longer having the authorized minimum capital for a public company, it may be necessary to re-register as a private company.
(ii) The Articles of Association may restrict the company's ability to reduce capital.
(iii) The reduction must be approved by the court.
H is hoping for a promotion. His wife is expecting a baby and they need the extra money. He needs to present the figures for his section, but the true figures do not reflect well on his manager. What should H do?
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?
Which of the following requires the approval of 75% of all the company's shareholders who are entitled to vote?
In relation to the law of misrepresentation, which of the following is correct?
Faegan and Fabian run their own business selling expensive shoes. The business is a general partnership, so both Faegan and Fabian have equal authority within it.
Recently, the business has grown very large. Because of this, one of their friends suggests getting that they have their accounts audited.
Are they legally obliged to do this?
Zed plc has appointed Wye and Co (accountants) as auditors of the company. If the audit is carried out negligently which of the following are entitled to claim against the auditors?
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?
Pablo and Paula are in discussions with a potential buyer over the sale of their house. They tell the potential buyer that if they want to purchase the house for the full amount of £200,000, they'll need to send a letter that
confirms their offer by Friday. If they don't receive such a letter by then, they'll withdraw the house from the market.
Friday comes and no letter arrives. However, it turned out the potential buyer actually posted the letter on the Monday before, and it simply got lost in the post. The letter eventually turns up on the following Monday.
Baring this in mind, are Pablo and Paula legally obliged to sell their house?
A group of business associates are about to register X Ltd as a company limited by shares. The associates wish to restrict the company's objects so that the company is only authorized to carry on the business of retailing computer hardware and software. Which of the following is correct?
Which of the following resolutions of a private company limited by shares CANNOT be effected by using the written resolution procedure?
(i) An ordinary resolution to dismiss a director.
(ii) A special resolution to misapply statutory pre-emption rights in relation to a new issue of shares.
(iii) An alteration of the articles of association.
Which THREE of the following statements are correct regarding the CIMA Code of Ethics for Professional Accountants?
Which of the following is NOT one of the 'seven principles of public life', as defined by the Committee of Standards in Public Life?
Which of the following terms can be defined as follows?
"...the system by which companies are directed and controlled"
Which of the following does not apply to a private company which is about to declare a dividend?
Which of the following is correct?
(i) Purchasing a "shelf company" enables business to commence more quickly.
(ii) It is generally cheaper to purchase a "shelf company", than to arrange for a solicitor or accountant to register a new company.
(iii) Incorporating a company by registration enables the company's documents to be drafted to the particular needs of the incorporators.
Abel has just completed an audit on a large law firm. He has decided to issue a modified audit report with a qualified opinion due to the issues he discovered regarding misstatements in the company's financial records.
Why has Abel decided to issue the report with a qualified opinion as opposed a different kind?
Which THREE of the following statements are correct in relation to the essential elements of a contract?
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.
Which of the following is NOT a correct distinction between shares and debentures?
Maintaining professional knowledge and skill at the level required to ensure that a client or employer receives competent professional service demonstrates the CIMA Code of Ethics fundamental principle of:
The majority of developed countries require publicly quoted companies and large companies to produce annual financial statements which are then audited by an external auditor.
Which of the following statements regarding the requirement for external audit is Incorrect?
Kane is a management accountant for business in the City. When looking through the company's latest financial reports he finds that company has been paying far less tax than it should be.
After consulting the company's management, Kane discovers that the company had been deliberately paying less tax and are not interested in taking action to rectify it.
As Kane has done all he can to try and solve the issue himself, it's clear that he now needs to take steps to disassociate himself from the misleading information.
How might he do this?
Select ALL that apply.
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?
A, B and C carry on business in a general partnership. A has proved an unsatisfactory partner in that he is continually absent from work for no justifiable reason. B and C wish to expel A from the partnership. Which of the following is CORRECT?
How can values become part of a company's DNA? Choose TWO of the following options.
Mr A sent an email to Mr B offering to sell him some goods for $1.000 Mr B replied by email stating I'll buy the goods Payment will be made over the next 4 weeks." Mr B has now discovered that Mr A has sold the goods to Mr C. Which of the following is correct?
You work for an international mining company. Which of the following corporate issues is NOT related to ethics or social responsibility?
In relation to the law of misrepresentation, which of the following statements is incorrect?
Being offered gifts and hospitality can give rise to threats to compliance with fundamental principles. Which of the following statements is NOT in accordance with the CIMA Code of Ethics?
R, S and T are the only shareholders in RST Ltd each holding 5,000 ordinary £1 shares. R is the only director of the company. The articles of association of RST contain the following provisions:
1. R is to be a director of RST Ltd for life.
2. In the event of any resolution to dismiss R by ordinary resolution his votes shall count three times.
Which of the following is CORRECT?
(i) Provision 1 is void as a director cannot be appointed for a period exceeding 3 years.
(ii) Provision 2 is valid and R may outvote any proposed resolution to dismiss him.
(iii) Provisions 1 and 2 are both unenforceable by R as they are not ordinary membership rights.
Which ONE of the following statements is incorrect? Ethical standards are:
Which of the following is NOT one of the 'seven principles of public life', as defined by the Committee of Standards in Public Life?