BA4 - Fundamentals of Ethics, Corporate Governance and Business Law
Last exam update: Dec 06 ,2025
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Question 1
According to the CIMA code of ethics, if appropriate safeguards cannot be identified to address threats to compliance with fundamental principles, a professional accountant should:
A.
Proceed unless the situation will involve breaking the law
B.
Proceed with necessary caution
C.
Identify the situation to superiors before continuing with the professional service involved
D.
Refuse to remain associated with the matter creating the conflict, where possible
Answer:
D
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Question 2
Which TWO of the following are reasons why a company would choose to introduce a values based code of ethics?
A.
To improve the cost efficiency of internal processes
B.
To identify gifted staff
C.
To provide guidance for staff
D.
To help staff to tackle the ethical dilemmas that they might face at work
Answer:
C, D
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Question 3
Which of the following courses of action is NOT part of the process that the CIMA Code of Ethics expects of professional accountants in resolving an ethical conflict?
A.
Determine the appropriate course of action that is consistent with the fundamental principles identified
B.
Evaluate the consequences of each possible course of action
C.
Consult with other appropriate persons within the firm or employing organization for help if the matter remains unresolved
D.
Proceed with the course of action that would do least damage to a professional accountant's career prospects
Answer:
D
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Question 4
High profile corporate scandals in the past decade have had an effect on which of the following?
A.
Public trust in business
B.
Legislation in the US and elsewhere
C.
Public trust in accountants
D.
All of the above
Answer:
D
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Question 5
You work for a company based in a capital city that leases office space to other organizations. Which of the following corporate issues is not related to ethics or social responsibility?
A.
The energy efficiency of the buildings that you rent out
B.
Honest and transparent contracts with your customers
C.
Whether your buildings provide a safe and secure environment for workers and visitors
D.
Having the prestige of renting out some of a capital city's most famous landmarks
Answer:
D
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Question 6
Which of the following groups is a non-financial as opposed to a financial stakeholder of a company?
A.
Competitors
B.
Shareholders
C.
Customers
D.
Suppliers
Answer:
A
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Question 7
Which of the following groups is a financial as opposed to a non-financial stakeholder of a company?
A.
Journalists
B.
Local charities
C.
Employees
D.
Competitors
Answer:
C
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Question 8
Which ONE of the following statements is correct?
A.
Adherence to legislation is always mandatory
B.
Adherence to codes of ethics is always mandatory
C.
Adherence to social responsibility policies is always mandatory
D.
Adherence to charitable donation policies is always mandatory
Answer:
A
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Question 9
Which of the following are TWO reasons why new legislation might be introduced in response to corporate scandals?
A.
To prevent this type of unethical behavior by making it illegal
B.
To punish individuals for adhering to codes of ethics
C.
To encourage companies to make their own decisions about ethical matters
D.
To enforce minimum standards of behavior
Answer:
A, D
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Question 10
You work for a company that designs and manufactures children's toys. Which of the following is NOT an example of social responsibility that your company might choose to address?
A.
The use of chemicals in manufacturing
B.
The welfare of workers who assemble the company's products
C.
The environmental impact of transporting toys from the country of manufacture to the country of sale
D.
Whether the recommended retail price of a particular product provides sufficient margin after the unit cost of production is taken into account
Answer:
D
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Question 11
You work for a publishing company. Which of the following corporate issues is NOT related to ethics or social responsibility?
A.
Whether advertisers are given more favorable editorial coverage than other companies that do not advertise in your company's magazines
B.
Whether the paper used for the magazines comes from sustainably managed forests or can be recycled
C.
Whether your company's magazines are more popular than competitor titles
D.
Whether sales targets are so high that they implicitly encourage salespeople to ignore corporate values and principles
Answer:
C
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Question 12
You work for a clothing retailer. Which of the following corporate issues is NOT related to ethics or social responsibility?
A.
Sweatshop labor
B.
Whether your clothes appeal to your target markets
C.
Knowingly selling fake versions of this season's high profile designer clothes
D.
The use of natural or organic material in your clothes
Answer:
B
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Question 13
You work for an international mining company. Which of the following corporate issues is NOT related to ethics or social responsibility?
A.
The impact of your operations on the environment
B.
Your company's response to HIV/Aids among workers in sub-Saharan Africa
C.
Deciding whether to approve a planned refurbishment of head office
D.
Whether employees are paid a fair wage
Answer:
C
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Question 14
You work for a pharmaceutical company. Which of the following corporate issues is NOT related to ethics or social responsibility?
A.
Flying doctors and their families to the Maldives for an all expenses paid working holiday to explain the benefits of one of your new products
B.
Whether to reduce the price of your products in poor countries
C.
Charitable donations
D.
Redesign of the company logo
Answer:
D
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Question 15
You work for a construction company. Which of the following corporate issues is NOT related to ethics or social responsibility?
A.
The reduction of waste on building sites
B.
The formation of a world class team of employees to win more business
C.
The use of recycled paper in head office
D.
Health and safety training for employees and sub-contractors