CIMA cimapra17-ba4-1 practice test

Question 1

You are the manager of the finance function of a large engineering company According to IFAC's
drivers of sustainable corporate success, which of the following would be a method by which you
could improve the value of your department to the company?
A. Providing ethical leadership which focuses on minimizing environmental costs sustainably.
B. Providing ethical and strategic leadership which focuses on sustainable value creation.
C. Providing strategic leadership which sustains the maximization of short term value.
D. Providing sustainable ethical and strategic leadership which focuses on operating profit.

Answer:

B
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Question 2

Corporate governance codes may either be rules-based or principles-based
Which of the following statements correctly describes a rules-based approach to corporate
governance?
A. A rules-based approach requires that a company complies with the rules or explains why it has
not.
B. A rules-based approach instils the code into law but leaves the sanctions for non-compliance to be
decided and enforced by the shareholders.
C. A rules-based approach instils the code into law but encourages compliance with the spirit of the
law.
D. A rules-based approach instils the code into law with appropriate penalties for transgression.

Answer:

D
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Question 3

Which of the following statements are correct regarding companies'?
1. Both public and private companies must have a minimum amount of share capital before they
can commence trading.
2. The shareholders of both public and private companies cannot interfere in the management of
the company.
3. The minimum number of directors for both public and private companies is two

• A. 1 only
• B. 2 and 3 only
• C. 1 and 2 only
• D. 2 only

Answer:

A

Question 4

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Which THREE of the following statements are correct regarding the CIMA Code of Ethics for
Professional Accountants?

• A. Where a statutory requirement is in conflict with a provision of the CIMA Code, the CIMA Code requirement prevails
• B. The CIMA Code is mandatory for all CIMA members and students, and is applicable to all professional services.
• C. The CIMA Code imposes an obligation on CIMA members and students to comply with relevant laws and regulations
• D. Professional accountants should consider the ethical requirements contained in the CIMA Code as the basic principles which they should follow in performing their work
• E. The CIMA Code is an example of a compliance driven ethical framework

Answer:

A, B, C

Question 5

A distinguishing mark of the accountancy profession is its acceptance of the responsibility to act in
the public interest Therefore:

• A. the public interest will always be served if an accountant complies with his or her employer's corporate ethical policies
• B. frauds which are detected in an audit must be reported to the public
• C. a professional accountant's responsibility is not exclusively to satisfy the needs of an individual client or employer
• D. professional accountants must be prepared to break laws that they consider to be against the public interest

Answer:

B

Question 6

DRAG DROP
The Global Reporting Initiative (GRI) has produced Sustamability Reporting Guidelines, setting out
categories and aspects which should be addressed through sustainable reporting.
Place the GRI categories next to the appropriate aspect of sustamability below.
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Answer:

Question 7

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.

• A. 1 only
• B. 1 and 2 only
• C. 2 and 3 only
• D. 1,2 and 3

Answer:

A

Question 8

Which THREE of the following statements are correct in relation to the essential elements of a
contract?

• A. A conditional offer cannot be accepted until the condition has been satisfied
• B. A revocation of an offer is only valid when it is received by the offeree, unless it is sent by post in which case it is valid as soon as it is posted
• C. Even if the parties are fully in agreement, the agreement will be unenforceable unless at least one of the parties has provided consideration
• D. A request for further information in relation to an offer has the effect of cancelling the offer
• E. If an offer is rejected it can only be revived by the person who made the offer
• F. Once an offer has been made it does not exist forever but will lapse after a reasonable time

Answer:

A, D, F

Question 9

Which of the following statements reflects the leadership principles of corporate governance on
board behavior?

• A. Good governance practice vests the responsibility for board decision making with the CEO
• B. Good governance practice encourages control to be concentrated in the hands of one director
• C. Good governance practice encourages independent challenge and rigour in strategic development
• D. Good governance practice encourages compromise, consensus and discourages confrontation in board decision-making 200/204 Questions & Answers PDF P-

Answer:

C

Question 10

Agency theory is often cited as an explanation for the development of corporate governance Which
TWO of the following statements are correct?

• A. Agency theory assumes that the goals of the managers of the company are the same as the owners of the company
• B. Agency theory requires that the managers of the company act in the interests of the owners of the company
• C. Agency theory assumes that the goals of the managers of the company are different from the owners of the company
• D. Agency theory explains the issues which arise from the separation between the owners of the company and those who control it
• E. Agency theory defines the problems that arise from the dependency of an organisation on resources

Answer:

C, D