Ethics, Ethical Conflicts & Corporate Governance
Revision Questions
01
(i)
(ii)
(iii)
(iv)
02
Which of the following is NOT one of the “seven principles of public life” as
defined by the Committee of Standards in Public Life?
Honesty
Professionalism
Leadership
Integrity
Which of the fundamental principle of CIMA code of ethics is defined as follows;
“A professional accountant should be straight forward and honest in all
professional and business relationships”
(i)
(ii)
(iii)
(iv)
03
(i)
(ii)
(iii)
(iv)
04
(i)
(ii)
(iii)
(iv)
05
(i)
(ii)
Objectivity
Professional Behaviour
Integrity
Professional Competence and due care
According to the Combined Code, who is responsible for setting the company‟s
values and standards?
The Managing Director
The Chairman
The Shareholders
The Board
Which of the following is not one of the fundamental principles of CIMA‟s Code
of Ethics?
Integrity
Accountability
Objectivity
Professional behavior
Which of the following are the TWO main difference between the structure and
function of Company Boards in Germany and the UK?
In Germany, the Board reports on Corporate Governance issues where in the
UK it does not
In Germany, boards are responsible for both management and governance,
where in the UK they are responsible only for one or the other
(iii)
(iv)
06
(i)
(ii)
(iii)
(iv)
07
(i)
(ii)
(iii)
(iv)
08
(i)
(ii)
(iii)
(iv)
09
In Germany, Boards often have a two tier structure, where as in the UK they are
normally unitary
In Germany, employees are usually represented on the board, where as in the
UK they are not.
Which of the following is NOT one of the fundamental principles of CIMA‟s
Code of Ethics?
Integrity
Confidentiality
Objectivity
Respect
Which of the following is NOT a “financial stakeholder” of an organization?
Government
Customer
Competitor
Employee
In the UK, the body responsible for taking an appropriate role in the
development of statutes, regulations and accounting standards which affect the
conduct of auditing and assurance services, both domestically and internationally
is;
The Financial Review Board
The International Federation of Accountants
The Auditing Practices Board
The Professional Oversight Board for Accountancy
Which of the fundamental principles of CIMA‟s code of ethics is defined as
follows;
“A professional accountant should not allow bias, conflict of interest or undue
influence of others to override professional or business judgment”
(i)
(ii)
(iii)
(iv)
10
(i)
(ii)
(iii)
Integrity
Professional Competence and due care
Objectivity
Professional behavior
Which of the following is correct in relation to the Combined Code?
The Code gives rise to a disclosure requirement
Breach of the Code gives rise to criminal penalties
Breach of the Code gives rise to civil liability.
(i)
(ii)
(iii)
(iv)
11
(i)
(ii)
(iii)
(iv)
12
(i) and (ii) only
(ii) and (iii) only
(iii) only
(i) only
The body responsible for reviewing the operations of the accounting profession
worldwide is
The professional oversight Board for Accountancy
The Financial Reporting Council
The Financial Review Board
The International Federation of Accountant
Which of the following terms can be defined as follows?
“How an organization manages its relationships in the wider community”
(i)
(ii)
(iii)
(iv)
13
(i)
(ii)
(iii)
Social responsibility
Ethics
Corporate Governance
Professional behaviour
Which of the following statement(s) is / are true?
(iv)
Society‟s values and expectations change from time to time
Professionals always need to behave with integrity
When taking a decision professional accountants need not to comply CIMA‟s
code of ethics
When taking a decision social responsibility need not be considered
(i)
(ii)
(iii)
(iv)
i. only
i and ii only
i, ii, and iii only
all of the above
14
(i)
(ii)
(iii)
(iv)
Lim is employed as management accountant of a large retailer. Lim has been
invited to take a holiday “all expenses paid” at a villa owned by the managing
director of a supplier organization. If Lim accepts the invitation, which of the
following fundamental principle of CIMA‟s Code of Ethics will be compromised?
Objectivity
Confidentiality
Integrity
Professional Behaviour
15
(i)
(ii)
(iii)
(iv)
16
(i)
(ii)
(iii)
(iv)
17
(i)
(ii)
(iii)
(iv)
18
Which of the following is responsibility of the Chairman, according to the
Combined Code?
Setting the agenda for Board meeting
Carrying out the policies of the Board
Authorising major investments
Operational control
Which of the following is NOT one of the fundamental principles of CIMA‟s
Code of Ethics
Courtesy
Professional Behaviour
Integrity
Objectivity
Which of the following statements best describes the situation in the UK?
There is a little or no corporate governance
All corporate governance is enforceable in law
Some corporate governance is enforceable in law
No corporate governance is enforceable in law
Which of the following terms can be defined as follows;
“the system by which companies are directed and controlled”
(i)
(ii)
(iii)
(iv)
19
(i)
(ii)
(iii)
(iv)
20
(i)
(ii)
(iii)
(iv)
Social responsibility
Ethics
Professional Behaviour
Corporate Governance
Which of the following is an “Interest Stakeholder” in an organization?
Government
Customer
Competitor
Employee
Grace is employed as management accountant of a large retailer. Grace has been asked
to dismiss one her colleagues for “misconduct”, but she is aware that the colleague has
done nothing wrong and that her employer is trying to avoid paying any redundancy
settlement. If Grace accepts the request, which of the following fundamental principles
of CIMA‟s Code of Ethics will be compromised?
Confidentiality
Professional Behaviour
Objectivity
Integrity
21
(i)
(ii)
(iii)
(iv)
22
(i)
(ii)
(iii)
(iv)
23
(i)
(ii)
(iii)
(iv)
24
(i)
(ii)
(iii)
(iv)
25
(i)
(ii)
(iii)
(iv)
Which of the following is NOT a financial stakeholder of an organization?
Employee
Media
Customer
Government
Which one of the following is correct in relation to the Combined Code?
If a listed public company fails to produce a report explaining why it has not
implemented the Code‟s recommendation‟s it has acted in breach of the code
If a public company fails to comply with the code, it may be sued for breach of
statutory duty by those who have suffered loss as a result
Of the Code is ignored by any company, no action may be taken as it has no
legal status
If any company fails to comply with the Code, the directors may be sued for
breach of duty by the company on behalf of the shareholders.
Jo is employed as management accountant of a large retailer. Jo has been asked to
call a supplier and promise settlement of their account “next week”. Jo is aware
that her employer will definitely not have sufficient funds available to make the
payment. If Jo accepts the request, which of the following fundamental principles
of CIMA‟s Code of Ethics will be compromised?
Confidentiality
Professional Behaviour
Integrity
Objectivity
Which of the following is a “financial stakeholder” of an organization?
Competitor
Non Government organisation
Employee
Media
Which statement is true?
Professional accountants are expected to have regard to the public interest in
performing their duties
Professional accountants are expected to have regard to their personal interest.
Professional accountants are expected to have regard to the company goals only.
Professional accountants are not expected to have regard to the public interest in
performing their duties
26
(i)
(ii)
(iii)
(iv)
27
(i)
(ii)
(iii)
(iv)
Which statement is true?
The IFAC code is mandatory for all members firms or bodies of IFAC
The IFAC code is a guide for all members firms or bodies of IFAC
The professional accountants is not bound by the principles of confidentiality
after the end of the relationship with a client or employer
The five qualities and virtues sought by CIMA are reliability, accountability,
fairness, responsibility and timeliness.
Which statement is incorrect?
The Professional Oversight Board for Accountancy (POBA) is part of the
Financial Reporting Council (FRC)
The CIMA “Code of Ethics” includes reference to how a professional
accountant can raise a concern about unprofessional or unethical behaviour.
“The Seven Principles of Public Life” govern all professional accountants.
The Auditing Practices Board (APB) does not reviews the review the regulatory
activities of the professional accounting bodies.
28
Which Statement is incorrect?
(i)
(ii)
(iii)
(iv)
Codes of ethics are voluntary
Governance refers to a how an organization is run
Social responsibility refers to a company‟s relationship with its shareholders
Law will be implemented if the code of ethics is not practiced
29
Which Statement is correct?
(i)
(ii)
(iii)
(iv)
Conflicts of interest only arise in business life
Dilemmas arise when the boundaries of right and wrong are not clear
The CIMA „code of ethics‟ does not include guidance on how to resolve an
ethical dilemma
Dilemmas arise only to professional accountants
30
Which of the following is correct?
(i)
It is criminal offence for listed companies to fail to comply with the Revised
Combined Code
A listed public company has complied with the Combined Code if it produces a
report explaining why it has not implemented its recommendations
The Combine Code has no status and may be ignored by all companies
A public company may be sued for breach of statutory duty if it fails to comply
with the combine code.
(ii)
(iii)
(iv)
31
In which of the following does a director owe duties of care and skill?
(i)
(ii)
(iii)
The public at large
The company‟s creditors
The Shareholders
(i)
(ii)
(iii)
(iv)
(i) only
(ii) only
(i) and (ii) only
(iii) only
32 Which of the following are not represented at board level in the UK?
(i)
(ii)
(iii)
Creditors
Shareholders
Employees
(i)
(ii)
(iii)
(iv)
(i) only
(i) and (ii) only
(iii) only
(i) and (iii) only
33 Which of the following types of committees is not recommended by the Combined
Code?
(i)
(ii)
(iii)
(iv)
Planning Committee
Nominations Committee
Remunerations Committee
Audit Committee
34 Which of the following are examples of unitary board structure?
(i)
(ii)
(iii)
An all executive board
A majority executive board
A majority non – executive board
(i)
(ii)
(iii)
(iv)
(i) only
(i) and (ii) only
(ii) and (iii) only
(i), (ii) and (iii)
35 Which of the following would not help accountants to act in the public interest and
with social responsibility?
(i)
(ii)
(iii)
Staying up to date with developments in business and accounting
Defining long term career objectives
Abiding by the CIMA Code of Ethics for professional accountants
(iv)
Acting with integrity
36 Which of the following is not true of ethical guidelines and standards?
(i)
(ii)
(iii)
(iv)
Ethical guidelines and standards encourage good practice
Accountants are required by law to follow ethical guidelines and standards
CIMA members must adhere to CIMA‟s Code of Ethics
CIMA members must adhere to the International Federation of Accountant‟s
(IFAC) Code of Ethics.
37 Which of the following is not true?
(i)
(ii)
(iii)
(iv)
The CIMA Code of Ethics takes an ethically based approach
The IFAC Code of Ethics takes a compliance based approach
Company code of ethics can take an ethically based or a compliance based
approach
Codes of Ethics are often based on core values of principles
38 Which of the following is not the case? Professional accountants must keep
themselves up to date professionally because:
(i)
(ii)
(iii)
(iv)
Accountants have a duty to maintain professional knowledge and skills
Accountants have a duty to provide a client or employer with competent
professional service.
It is a requirement of CIMA Code of Ethics
It is a requirement of the Seven Principles of Public Life.
39 One of your colleagues has provided information that you believe he knows to be
misleading. If you are correct, this violates CIMA‟s fundamental principle of:
(i)
(ii)
(iii)
(iv)
Integrity
Objectivity
Professional Competence and due care
Confidentiality
40 CIMA has a Code of Ethics for Professional Accountants because the code
(i)
(ii)
(iii)
(iv)
Provides evidence that accountants behave ethically at all times
Provides a basis for complaints or cases under CIMA‟s disciplinary procedures
Tell stakeholders what is required of them in terms of behaviour
Focuses in providing members with information on what is and is not required
of them by law