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

1. 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?

A) No - Only small companies need an internal auditing department.
B) No - All companies should be externally audited.
C) Yes - All companies should have their own internal auditing department.
D) Yes - Its large size and complexity increases the need for an internal auditing department.

2. Which of the following does not apply to a private company which is about to declare a dividend?

A) The company's net assets must equal the total of called up share capital plus un-distributable reserves.
B) The company must take account of accumulated realized losses.
C) The company must have accumulated realized profits.
D) There must be profits available for distribution as a dividend.

3. Working late one evening, you see a colleague copying information on to series of CD Roms. He tells you that software is too expensive for him to afford for his home computer but that he needs the software for his own personal use and in case he might take work home at some point. Is this an ethical issue and why?

A) No - one additional copy of the software makes no difference to the manufacturer, so this is not an ethical issue
B) Yes - unauthorized reproduction would be regarded by the manufacturer as software piracy
C) Maybe - depending on whether he uses the software for personal or business use
D) Maybe - depending on whether his income is really insufficient to cover the cost of software purchase

4. A business that has an internal ethical code is likely to experience which of the following benefits? Select ALL that apply.

A) Better communication with staff
B) Reduced risk
C) Competitive advantage
D) Consistency of conduct
E) Improved reputation

5. A business that behaves ethically may experience which of the following benefits; Select ALL that apply.

A) Higher productivity levels
B) Competitive advantage
C) Increased profits
D) Increased market penetration
E) Improved reputation
F) Little or no legal action
G) Improved staff morale

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