BA4 CIMA Fundamentals of Ethics, Corporate Governance and Business Law Free Practice Exam Questions (2025 Updated)

Zed plc contracted to build an apartment block for Exe Ltd. Which of the following would provide Zed with a valid excuse not to proceed with the contract?

(i) A key employee who was to manage the project has resigned.

(ii) The price of the materials to be used by Zed plc have increased to such an extent that the building can only be completed at a loss to Zed plc.

(iii) Planning permission has been refused.  

Alongside technical competence what, for example, should the management accountant ask themselves?

Louis is the only director in MNO Ltd. Max, Nick and Olga each hold one third of the issued share capital of the company. Louis has proposed an amendment to the company's Articles of Association. Which of the following is correct?       

A business has been registered under the name ABC Ltd. Which of the following types of business organization must this be?

Which of the following is CORRECT?

(i) A company limited by shares is a legal person separate and distinct from those who own and manage the company

(ii) If the company structure is used as a mere façade for fraudulent purposes the company but not the directors or shareholders can be held liable

(iii) If the company has carried on business despite the fact that insolvency appeared inevitable the directors may be personally liable for the debts contracted.

Which of the following statements is correct? 

(i) To succeed in the tort of negligence, a claimant must show that the defendant owed him a duty of care.

(ii) To succeed in the tort of negligence, the defendant must have broken a duty to take care.

(iii) To succeed in the tort of negligence, it is necessary to show that the claimant suffered loss or harm as a result of the defendant's breach of duty.

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?

S contracted to buy a portable television from AB (Retailers) Ltd. The contract contained a term excluding liability for any breach of the condition implied by the Sale of Goods Act 1979 that the goods should be of "satisfactory quality".

Which of the following is correct? 

(i) It is a criminal offence to attempt to exclude the term as this is a consumer sale.

(ii) The clause is void unless it can be shown to be reasonable.

(iii) The clause is void.

Which of the following causes a charge to be void?

(i) A failure to register the charge at Companies House within 21 days of its creation.

(ii) A failure to register the charge at the company's registered office.

(iii) The issue of a charge to secure borrowing which is outside the directors' authority 

A was disqualified from driving but continued his employment as a driver for XYZ plc. The company discovered that A had lost his driving license and immediately dismissed him without notice.  

Which of the following is correct? 

 i. As no notice was provided A's dismissal amounts to constructive dismissal.

ii. The employer was justified in dismissing A without notice as he was unable to continue his employment.

iii. A may make a claim for wrongful dismissal as, although his dismissal was justified, he was entitled to notice.  

Which of the following terms can be defined as follows?

"...the generic way that organizations are run"

Which of the following need NOT be submitted in order to register a private company limited by shares?

(i) Articles of association

(ii) The name of the company secretary

(iii) A statement of share capital

Which of the following remedies is available as of right in the event of a breach of contract?

(i) Specific performance.

(ii) Damages.

(iii) An injunction.

X was employed by Bee Ltd as its senior design consultant. X contracted with Bee Ltd that, when his employment with the company ceased, he would not act in competition with it or solicit its customers. After X left Bee Ltd, he registered a company called Cee Ltd which immediately began working in competition with Bee Ltd and soliciting its customers. Bee Ltd complained to X about this conduct, but X stated that, as the work was being undertaken by Cee Ltd, a separate legal entity, X had not acted in breach of the agreement with Bee Ltd.

Which of the following statements is correct?           

You are the financial controller of SB Company, responsible for directing the budgeting process For the current year, you were instrumental in gaming approval of a particular manager's budget without modification. As a token of appreciation, the manager has given you a gift voucher for a local restaurant In considering whether or not to accept the gift, you should refer to which of the following fundamental ethical principles?

Which of the following describes a principles-based approach to ethical standards in an organisation?

The objective behind the approach is to:

Which of the following type of committee is NOT required by the UK Combined Code?

The IFAC has eight main drivers of sustainable corporate success. Which of the following are included in the eight mam drivers?

1, Innovation and adaptability

2. Effective leadership and strategy.

3. Board control and responsibility

Which of the following is incorrect?

Adam, Brian, Charles and David each held 25% of the issued share capital of ABCD Ltd. Adam has recently issued further shares to himself in order to increase his voting power. Which of the following is incorrect?

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

Exe Ltd contracted to manufacture and deliver machinery to Wye plc for a price of £100,000. As required by the contract, Wye plc paid a deposit to Exe Ltd of £20,000. In order to fulfil its contract it has been necessary for Exe Ltd to purchase specialist tools and equipment. Before the contract was completed, Exe Ltd's factory was destroyed by fire. Neither Exe Ltd nor Wye plc was in any way responsible for the fire.

Which of the following is INCORRECT? 

(i) The contract between Exe Ltd and Wye plc has become frustrated.

(ii) The contract may remain enforceable if the parties have agreed a force majeure clause which specifies the repercussions of a factory fire.

(iii) As the deposit was payable before the contract became unenforceable, Wye plc will lose its deposit of £20,000. 

What is the purpose of the equitable remedy of rescission?

According to CIMA, governance and social responsibility policies are:

A company wants to let its employees know that fraud will not be tolerated. It also wants to inform them of the consequences of committing fraud.

Which of the following would best achieve this?

'Remuneration' is one of the main principles in the Corporate Governance Code. Which of the following is NOT best practice under the 'Remuneration' principle?

Which of the following terms can be defined as follows?

"...the way an organization manages its relationships"

Anne was induced to enter into a contract with Benny by his negligent misrepresentation. Which of the following is correct?

(i) Anne has a remedy against Benny in the tort of negligence.

(ii) Anne has a remedy against Benny under the Misrepresentation Act 1967.

(iii) Anne has a remedy in the tort of deceit. 

The UK Corporate Governance Code is primarily directed at which type of business organization?