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

1. Which of the following statements about the relationship between external and internal auditors is FALSE?

A) In some countries, there is a statutory requirement to have both an internal and an external audit
B) Oversight of the work of external auditors is the responsibility of the chief internal auditor
C) Internal and external auditors should meet regularly to ensure timely and efficient completion of the work
D) Internal auditors may provide engagement work programs and working papers to external auditors

2. Which of the following is incorrect?

A) A ratio decidendi of the Supreme Court is binding on the Court of Appeal.
B) A ratio decidendi of the Court of Appeal is binding on the High Court.
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.

3. Which THREE of the following are characteristics of Limited Liability Partnerships ("LLPs")?

A) LLPs have no perpetual succession
B) LLPs can hold property in their own name
C) LLPs are usually created by formal registration under statute
D) LLPs can enter into contracts in their own name
E) An LLPs partners are jointly and severally liable for the debts of the LLP

4. Which of the following is a civil action?
i. An action by a local authority against a restaurant for selling impure food.
ii. An action by a taxpayer against Her Majesty's Revenue and Customs ("HMRC") in relation to an expenses claim which has been refused by the Inspector of Taxes.
iii. An action by Exe Ltd against Zed Ltd for supplying equipment which was found to be dangerous.

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

5. Articles of association regulate the relationship between:

A) the company and its directors
B) the company and its creditors
C) the company and its members
D) the company and its customers

Solutions: