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

1. Which of the following statements is correct in relation to a misrepresentation?

A) If a person can show that he or she was induced to contract by a misrepresentation then a court must grant a remedy, irrespective of the time taken to commence the action against the misrepresents.
B) A person selling goods may be hekJ liable in misrepresentation if he or she remains silent during the negotiations and fails to correct any misunderstandings on the part of the buyer
C) If one person attempts to persuade another to enter into a contract by misrepresenting the facts, the intended victim will have a remedy, unless the misrepresentation did not induce the intended victim to contract
D) A misrepresentation is a false statement of fact or opinion made by one person to another before a contract is formed and which causes the contract to be automatically cancelled

2. Listed companies must comply with the Corporate Governance Code If they do not, which of the following penalties will apply?

A) Criminal penalty
B) Penalty under the Corporate Governance Code
C) No formal penalty
D) Civil penalty

3. Who is bound by the articles of association?

A) The company
B) The company + Shareholders
C) Stakeholders
D) Shareholders
E) The company + Stakeholders

4. 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?

A) 15 years.
B) 10 years.
C) 5 years.
D) No maximum.

5. In relation to corporate governance, which of the following statements best describes the situation in the UK?

A) Some corporate governance is enforceable in law
B) There is little or no corporate governance
C) No corporate governance is enforceable in law
D) All corporate governance is enforceable in law

Solutions: