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CIMA Certification BA4

BA4

Exam Code: BA4

Exam Name: Fundamentals of Ethics - Corporate Governance and Business Law

Updated: May 28, 2026

Q&A Number: 660 Q&As

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

1. In which of the following situations has a contract of employment arisen?

A) A written offer of work is made to R which specifies the services required but omits the pay rate for the job. This is not accepted by R either in writing or verbally and R does not turn up for work
B) A verbal offer of work is made to S for the possibility of duties at a specified pay rate but the employer makes it explicit that, as the need for the services is not yet certain S is free to work elsewhere
C) A verbal offer of work is made to P at a given pay rate per hour for specified services The offer is not accepted by P either verbally or in writing but P turns up for work and performs the duties identified in the offer.
D) A verbal offer of work is made to Q at a given pay rate for specified services. The offer is not accepted by Q either verbally or in writing and Q does not turn up for work


2. 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) The shareholders may challenge the validity of the share issue using Section 994 of the Companies Act
2006, on the ground that the issue is "unfairly prejudicial to the interests of the shareholders".
B) The shareholders may ratify the share issue by ordinary resolution.
C) The company may proceed against Adam for breach of fiduciary duty.
D) The share issue is automatically invalid.


3. Which of the following statements is TRUE in relation to ethical dilemmas?

A) Professional accountants can be disciplined for encountering them
B) They can relate to someone's personal life, or professional life, but not both at the same time
C) They can be difficult to spot, since they are not always obvious
D) Inaction or silence is often the best way of dealing with them


4. Which of the following is INCORRECT in relation to directors' duties?
i. Directors who arrange for shares to be offered directly to their supporters in order to prevent a take- over bid are acting lawfully so long as they have the legal power to allot shares in the company's constitution.
ii. Directors may act in breach of their duties and still be complying with the UK Corporate Governance Code.
iii. Directors' duties are owed to the shareholders as a body and enforceable by the company.

A) (i) and (ii) only
B) (ii) only
C) (ii) and (iii) only
D) (i) only


5. Which of the following is correct if a promoter orders goods or services on behalf of a company limited by shares which is not yet registered?
(i) The promoter is personally liable for the order.
(ii) The promoter and the company are jointly liable for the order.
(iii) If the company ratifies the order after its registration, the company is liable and the promoter's liability for the order ceases.

A) (ii) only
B) (i) and (iii) only
C) (iii) only
D) (i) only


Solutions:

Question # 1
Answer: C
Question # 2
Answer: D
Question # 3
Answer: B
Question # 4
Answer: D
Question # 5
Answer: D

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