Free BA4 – Fundamentals of Ethics, Corporate Governance and Business Law Practice Test Question

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  Compliance with laws and regulations

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  Compliance with guidelines and standards

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  Avoid any action that discredits the profession

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  Avoid any action that discredits one's employer or client
  

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  Acting in the interests of one's employer

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  Seeking to maximize a company's shareholder return on investment

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  Playing a role within global, local, professional or other communities

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  Fulfilling public duty
  

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  Religious morality

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  Political morality

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  Career development

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  Personal friendships

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  Family commitments
  

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  Effective, well publicized complaints systems operating by the employing organization, the profession or a regulator

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  A company policy stating that ethics is discretionary and it is for individuals to decide on their standards of behavior

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  An explicitly stated duty to report breaches of ethical requirements

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  Leadership of an organization that establishes the expectation that members of an assurance team will act solely in their employer's interest
  

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  Responsibility

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  Reliability

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  Respect

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  Courtesy
  

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  Do as requested

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  Challenge the request

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  Ask for confirmation in writing from the director

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  Refuse

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  Bring the matter to the attention of the managing director

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  Ask for advice from the company's external auditors
  

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  To exclusively satisfy the needs of an individual client or employer

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  To act in the public interest

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  To comply with the ethical requirements of an employer's and professional body's code of ethics

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  To never question the truth of the information provided by an employer or client
  

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  It covers every possible dilemma that an accountant might face

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  It is based on values rather than compliance

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  It is a financial requirement of accountants

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  It establishes the fundamental principles of professional ethics for professional accountants
  

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  To prevent this type of unethical behavior by making it illegal

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  To punish individuals for adhering to codes of ethics

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  To encourage companies to make their own decisions about ethical matters

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  To enforce minimum standards of behavior
  

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  Obey the law

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  Disregard conflicting standards

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  Act in the interests of his or her employer

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  Raise his or her concerns by speaking up
  

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  B wrote to A accepting his offer to sell the van for £5,000.

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  B wrote to A and offered to buy the van at £4,800. B stated “if I hear no more from you in the next three days I shall assume that you agree to sell the van to me at that price.” Three days have now passed and B has heard nothing from A.

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  B offered to buy the van for £4,800. A wrote to B accepting his offer. B wrote back stating: “payment will be made over three months.”

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  B offered to buy the van for £4,500. A wrote to B accepting his offer but later changed his mind and sent an email to B withdrawing his acceptance. The email was read by B before he read A's letter of acceptance.
  

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  (i) only

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  (ii) only

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  (iii) only

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  (ii) and (iii) only
  

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  Whether advertisers are given more favorable editorial coverage than other companies that do not advertise in your company's magazines

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  Whether the paper used for the magazines comes from sustainably managed forests or can be recycled

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  Whether your company's magazines are more popular than competitor titles

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  Whether sales targets are so high that they implicitly encourage salespeople to ignore corporate values and principles
  

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  The board should be made up of a majority of non-executive directors.

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  All UK companies quoted on the London Stock Exchange have to include a statement of how the company has complied with the main principles set out in the Code.

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  There should be a clear division of responsibilities between the Chairman and the Chief Executive.

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  No director should be involved in deciding his or her own remuneration.
  

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  (i) only

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  (i) and (ii) only

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  (i) and (iii) only

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  (iii) only
  

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  If a company is in insolvent liquidation debenture holders are paid in priority to shareholders.

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  Unlike dividends, debenture interest must be paid, even if a company is trading at a loss.

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  Both share and debenture holders are members of the company and entitled to vote.

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  Debenture interest is deductible from gross profit in order to determine taxable profit. Dividends are profits.
  

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  Serious misconduct

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  Refusing to join an independent trade union.

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  Pregnancy

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  Selection for redundancy because of membership of a trade union.
  

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  Emerging issues that could affect public interest

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  Who's who in the industry

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  New legislation

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  Ethical issues relating to his or her work
  

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  The public

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  His or her clients

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  His or her employer

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  His or her company's competitors
  

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  (i) only

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  (ii) only

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  (iii) only

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  (i), (ii) and (iii)