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

Prepare effectively for your CIMA BA4 Fundamentals of Ethics, Corporate Governance and Business Law certification with our extensive collection of free, high-quality practice questions. Each question is designed to mirror the actual exam format and objectives, complete with comprehensive answers and detailed explanations. Our materials are regularly updated for 2025, ensuring you have the most current resources to build confidence and succeed on your first attempt.

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Total 661 questions

Tee Ltd placed some computers in its shop window with a notice which reaD. "Special offer. Internet-ready computers for sale at £400."

 

Which of the following is correct? 

(i) The notice amounts to an invitation to treat.

(ii) When a customer called in to the shop and offered £350 for one of the computers, he had made a counter offer.

(iii) The shop is obliged to sell a computer to anyone who can pay the price.

A.

(i) and (ii) only

B.

(i) only

C.

(i), (ii) and (iii).

D.

(ii) only

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

A.

The separation of the roles of Chairman and Chief Executive

B.

The appointment of independent non-executive directors to the Board

C.

The establishment of an audit committee

D.

The appointment of a senior external auditor to the Board

In resolving an ethical dilemma, which of the following would NOT be a useful approach to take when focusing on finding an ethical solution?

A.

Asking yourself whether the possible solutions are legally acceptable

B.

Testing the issue against CIMA's Code of Ethics

C.

Asking colleagues for their advice

D.

Identifying whether the possible solutions would make you more or less popular with colleagues

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

According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards?

A.

The Chairman

B.

The Board

C.

The Managing Director

D.

The shareholders

Which of the following is the superior source of law?

A.

A decision by the Supreme Court.

B.

A provision in an Act of Parliament

C.

A Regulation issued by the European Council of Ministers.

D.

A Statutory Instrument.

Which of the following can consideration take the form of?

A.

Money + Goods + Services

B.

Money

C.

Goods

D.

Services

E.

Money + Goods

F.

Money + Services

Tee Ltd has contracted to use Vee Ltd's "Grand Hotel" for a business conference. Which of the following would not be regarded as a valid excuse for Vee Ltd for the unavailability of the hotel on the agreed date?

(i) The hotel was closed due to flood damage.

(ii) The hotel was double booked.

(iii) The hotel manager had arranged to have the hotel redecorated; the decorators had failed to complete the work by the agreed date.

A.

(i) only

B.

(iii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii)

T is a senior accountant, but knows he needs to update himself on recent changes in accounting practice. He has been too busy; his manager is off sick and T is taking responsibility for his work load. T decides to let his CPD slide.  Another year won't matter.  Is this an ethical issue?

A.

Yes. T has a duty to maintain his professional knowledge

B.

No. T has a contractual duty to his employer; he can't take time off for CPD at this time

C.

Yes. T should not be doing two people's work

D.

No. T is an experienced accountant and doesn't need training

Demonstrating an attitude of esteem, deference, regard or admiration of others reflects the personal quality identified by the CIMA Code of Ethics as:

A.

Responsiveness

B.

Reliability

C.

Reverence

D.

Respect

Which of the following statements about the relationship between external and internal auditors is FALSE?

A.

Internal and external auditors should meet regularly to ensure timely and efficient completion of the work

B.

In some countries, there is a statutory requirement to have both an internal and an external audit

C.

Internal auditors may provide engagement work programs and working papers to external auditors

D.

Oversight of the work of external auditors is the responsibility of the chief internal auditor

F knows from preparing the accounts that the company she works for is going to have to make redundancies due to the recession.  She also knows that, despite the recession, the Managing Director continues to enjoy lavish perks and even uses a private jet. What should she do?

A.

Do nothing: Professionally, Mrs F is bound to respect the confidentiality of the information she has received

B.

Go to the press: Mrs F has a duty to report this in the public interest and the interest of the staff who will be made redundant

C.

Resign: F cannot carry on working at a company which is so unethical

D.

Leak the information: that way F's conscience will be clear but the information won't be traced back to her

B Ltd has an issued share capital of 1,000 ordinary £1 shares. The board of B Ltd has resolved to alter the company's articles of association. Which of the following is correct? 

(i) The articles may be altered by board resolution.

(ii) The articles may be altered by a written resolution of the shareholders.  

(iii) The articles may be altered by a special resolution of the directors.

A.

(i) only

B.

(ii) only

C.

(iii) only

D.

(ii) and (iii) only

A was employed by CDE plc and suffered an occupational injury. CDE plc has established that A was partly responsible for his own injuries. Which of the following claims is NOT affected by A's contributory negligence? 

(i) A claim against CDE plc in the tort of negligence

(ii) A claim against CDE plc for breach of statutory duty

(iii) A claim against CDE plc for breach of contract

A.

(i) only

B.

(ii) only

C.

(iii) only

D.

(i), (ii) and (iii)

Which of the following is NOT one of the main requirements of the UK Corporate Governance Code?

A.

The separation of the roles of Chairman and Chief Executive

B.

The appointment of independent non-executive directors to the Board

C.

The establishment of a Risk Committee

D.

The appointment of a competent Company Secretary

You are at a conference. The finance director of one of your competitors is boasting about top secret plans that she says will give her company market dominance. As she walks into a conference session, she accidently drops a folder marked "private and confidential". No one else notices and you are left alone in the room with the folder. Which of the following would be an ethical course of action and why?

A.

Read the contents in the hope that you can help your company by preventing your competitor's plans

B.

Read the contents in order to teach the arrogant finance director a lesson

C.

Return the folder to your competitor unopened because this is what you would hope would be done if you were in her situation

D.

Give the folder to a journalist friend at the conference because it is in the public interest to expose the company's plans

The body responsible for reviewing the accountancy profession worldwide is:

A.

The Professional Oversight Board for Accountancy

B.

The International Federation of Accountants

C.

The Financial Reporting Council

D.

The Financial Review Board

Which of the following is INCORRECT in relation to the European Commission?

A.

The Commission is the executive arm of the European Union.

B.

The Commission is made of independent Commissioners whose role is to further the interests of the Member States which they represent.

C.

The Commission represents the European Union in any trade negotiations with states which are not members of the European Union.

D.

The Commission has a duty to ensure the treaties and law are upheld, potentially by taking Member States or other institutions to the European Court of Justice.

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