CIMA Business Ethics and Corporate Governance

Question 1

Which CIMA ethical principle requires a professional accountant to be straightforward and honest in all professional and business relationships?

Accepted Answer

Integrity

Answer

Objectivity

Answer

Confidentiality

Answer

Professional competence

Question 2

Under CIMA's Code of Ethics, which of the following best describes a 'self-interest threat'?

Accepted Answer

A financial or other interest that inappropriately influences a member's judgment

Answer

A threat from a third party attempting to override professional judgment

Answer

A lack of knowledge causing poor professional decisions

Answer

Pressure from management to act against ethical principles

Question 3

According to CIMA's corporate governance principles, what is the primary role of the audit committee?

Accepted Answer

Overseeing financial reporting and internal controls

Answer

Setting executive remuneration packages

Answer

Approving the annual budget

Answer

Managing day-to-day financial operations

Question 4

Which governance concept separates the role of CEO from Chairman to reduce concentration of power?

Accepted Answer

Independence of leadership

Answer

Segregation of duties

Answer

Dual control principle

Answer

Agency theory application

Question 5

CIMA's ethical framework uses a 'threats and safeguards' approach. Which safeguard is created by the profession, legislation, or regulation?

Accepted Answer

Education and training requirements for entry

Answer

Engagement quality control reviews

Answer

Rotation of senior personnel

Answer

Consultation with a senior colleague

Question 6

Which of the following actions best demonstrates 'professional behavior' under CIMA's fundamental principles?

Accepted Answer

Complying with relevant laws and avoiding actions that discredit the profession

Answer

Disclosing client information to third parties when commercially beneficial

Answer

Maximizing personal earnings regardless of ethical implications

Answer

Accepting gifts from clients to maintain good business relationships