FBLw Examination 02

1 (i) (ii) Which of the following statement is correct? An employer is vicariously liable for all the acts committed by employees and independent An employer is vicariously liable for all torts committed by employees and independent contractors An employer is vicariously liable for torts committed by his employees in the course of their employment An employer is vicariously liable for all acts of his employees committed in the course of their employment Which of the following statements is correct in relation to the Working Time Regulation 1988? An employer can opt out of the requirements of the Working Time Regulation 1988 An employee cannot be required to work an average of 48 hours per week taken over a period 17 weeks An employee cannot be required to work an average of 48 hours per week taken over a period 13 weeks An employee cannot be required to work for more that 48 hours per week in any one week Which of the following statements is correct? The question as to whether a worker is an employee or an independent contract is one of law The question as to whether a worker is an employee or an independent contractor is one of fact The question as to whether a worker is an employee or an independent contractor is one of fact and law Whether a worker is an employee or an independent contractor depends entirely on the application of the control test 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

(iii) (iv)
2

(i)
(ii) (iii) (iv) 3 (i) (ii) (iii) (iv)

4
(i) (ii) (iii) (iv)

Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

Which of the fundamental principles 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) 6 (i) (ii) (iii) (iv) 7 (i) (ii) (iii) (iv) 8 (i) (ii) (iii) (iv) 9 (i) (ii) (iii)

Objectivity Professional Behaviour Integrity Professional Competence and due care According to the combined code, who is responsible for setting the companys values and standards? The The The The Managing Director Chairman Shareholders Board

Which of the following is not one of the fundamental principles of CIMAs 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 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 reasons is not an automatically unfair reason for dismissal? An employees protected disclosure An employees refusal to work in contravention of the Working Time Regulations 1998 An employees pregnancy
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(iv) 10 (i) (ii) (iii) (iv) 11 (i) (ii)

An employees gross misconduct Which of the following is NOT one of the fundamental principles of CIMAs 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 CIMAs 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

(iii)
12

(iv)

(i) (ii) (iii) (iv) 13

(i) (ii) (iii) (iv) 14 (i) (ii) (iii) (i) (ii) (iii) (iv)

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) and (ii) only (ii) and (iii) only (iii) only (i) only
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

15 (i) (ii) (iii) (iv)

The body responsible for reviewing the operations of the accounting profession worldwide is The The The The professional oversight Board for Accountancy Financial Reporting Council Financial Review Board International Federation of Accountant

16

Which of the following terms can be defined as follows? How an organization manages its relationships in the wider community

(i) (ii) (iii) (iv) 17 (i) (ii) (iii) (iv) 18

Social responsibility Ethics Corporate Governance Professional behaviour Which of the following statement(s) is / are true? Societys 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 CIMAs code of ethics When taking a decision Social responsibility need not be considred 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 Principles of CIMAs code of ethics will be compromised? Objectivity Confidentiality Integrity Professional Behaviour 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
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(i) (ii) (iii) (iv) 19 (i) (ii) (iii) (iv)

20 (i)

(ii)
(iii) (iv) 21

Which of the following is NOT one of the fundamental principles of CIMAs code of ethics Courtesy Professional Behaviour Integrity Objectivity Alan has contractual with L limited, under which he has agreed to work 15 hours a week for an annual salary of GBP 12,000/-. Alan may carry out the 15 hours work during any part of the week, as agreed with L limited in advance, but must carry out the work personally. The contract also specifies that Alan is entitled to one weeks notice for each year of employment. Alan has 20 days paid annual leave but he is not entitled to a pension. I s Alan; A part time worker It depends entirely on what Alan and L limited An independent contractor A casual worker Which of the following statement is correct? A wrongful dismissal cannot also be an unfair dismissal An unfair dismissal can also be wrongful dismissal An unfair dismissal must also be a wrongful dismissal (i) only (ii) only (ii) and (iii) only (i) 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) 22 (i) (ii) (iii) (i) (ii) (iii) (iv) 23 (i) (ii) (iii) (iv) 24

(i) (ii) (iii) (iv)

Social responsibility Ethics Professional Behaviour Corporate Governance Which of the following is an employer not liable for at common law?
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25

(i) (ii) (iii) (iv) 26 (i) (ii) (iii) (iv) 27

The negligent acts The negligent acts of the employer The negligent acts The negligent acts

of the employers employees to third parties of independent contractors to other employees of independent contractors to third parties of the employers employees to third parties.

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 CIMAs code of ethics will be compromised? Confidentiality Professional Behaviour Objectivity Integrity 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?

(i) (ii) (iii) (iv) 28 (i) (ii) (iii) (iv) 29

(i) If a listed public company fails to produce a report explaining why it has not implemented the Codes recommendations it has acted in breach of the code (ii) 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 (iii) Of the Code is ignored by any company, no action may be taken as it has no legal status (iv) 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.
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30

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 CIMAs Code of Ethics will be compromised? Confidentiality Professional Behaviour Integrity Objectivity An employer always has an implied duty to Provide facilities for smokers Give employees who leave a reference Provide work Behave reasonably and responsibly towards employees As a general rule, relation to a claim for unfair dismissal, which of the following statements are correct? Only employees below the normal retiring age may claim There is no qualifying period There is frequently no limit on the amount of compensation that a tribunal can award Claims must be made with in three months of the dismissal (i) only (ii) only (ii) and (iii) only (i) and (iv) only

(i) (ii) (iii) (iv) 31 (i) (ii) (iii) (iv) 32 (i) (ii) (iii) (iv) (i) (ii) (iii) (iv)

33 (i) (ii) (iii) (iv)

Which of the following reasons is not valid for the dismissal of an employee? Dishonesty Willful disobedience of a lawful order Membership of trade union Misconduct M has been employed by DL Ltd for four years. He was aware that the company was experiencing trading difficulties but is still shocked to be sent home without notice when DL Ltd is compulsorily wound up. He sues for wrongful dismissal but at the
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34

(i) (ii) (iii)

(iv)
35 (i) (ii) (iii) (iv) 36

hearing the liquidator proves that he has discovered that makes has embezzled GBP 20,000 from the company. Will M succeed in his claims? Yes. He has been constructively dismissed Yes. He has been wrongfully dismissed without notice and no regard should be paid to the embezzlement discover later. No. The employment contract was frustrated by DL Limiteds liquidation No. DL Limited was justified is its dismissal of M. In which one of the following areas is an employee not protected by legislation? Dismissal Dismissal Dismissal Dismissal on on on on grounds grounds grounds grounds of of of of age race disability sex

Which of the following statements is true? The most common remedy for wrongful dismissal is damages. The measures of damages is usually the sum that would have been earned if proper notice had been given. Where breach of contract leaves the employer as the injured party, he may dismiss the employee and withhold wages. (i) (ii) Both (i) and (ii) Neither (i) nor (ii) An employee has been continuously employed for one and a half years. He is entitled to: Three months notice A minimum of a weeks notice One weeks notice for every year of his employment A months notice Which of the following is not a duty of the employer? To provide a rest break of at least twenty minutes every six hours To provide an itemized pay slip To provide references for the employee when the employee seeks other employment To take reasonable care of employees Which of the following might not be termination of employment by a breach of contract?
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

(i)
(ii) (i) (ii) (iii) (iv) 37 (i) (ii) (iii) (iv) 38 (i) (ii) (iii) (iv) 39

(i) (ii) (iii)

(iv)
40 (i) (ii) (iii) (iv)

Summary dismissal Constructive dismissal Wrongful dismissal Inability on the employers behalf to continue Which one of the following is normally implied into a contract of employment? A duty to provide a reference A duty to provide work A duty to pay wages An employees duty to disclose his own misconduct Where must a claim for a wrongful dismissal be brought? The The The The employment tribunal only county court only high court only county court, the high court or the employment tribunal

41
(i) (ii) (iii)

(iv) 42
(i)

Which of the following is not a duty of the employee? reasonable competence Obedience to instructions ( unless required is unlawful or will expose employee to personal danger) Absence of error in work undertaken Personal services Which of the following is not a provision of the Employment Relations Act 1999? Ordinary maternity leave is extended to 26 weeks The qualifying period for additional maternity leave is reduced from two years to one Mother, fathers and adopted parents have the right to 13 weeks unpaid leave during the first five years Reasonable time off is to be allowed for family emergencies, for example absence of a carer Which of the following is normally not an implied term of a contract of employment? The The The The duty duty duty duty to obey the employers lawful instructions to provide work not to disclose confidential information to maintain mutual trust and confidence

(ii)
(iii) (iv)

43
(i) (ii) (iii) (iv) 44 (i) (ii) (iii) (iv) 45

Which of the following is a financial stakeholder of an organization?

Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

(i) (ii) (iii) (iv) 46 (i) (ii) (iii) (iv) 47 (i) (ii) (iii) (iv) 48 (i) (ii) (iii) (i) (ii) (iii) (iv) 49 (i) (ii) (iii) (iv) 50

Competitor Non Government organisation Employee Media How much continuity of employment must an employee have to be eligible for redundancy payment? 06 months 02 years 01 year None Which of the following statement is correct? Employee who has worked for 13 weeks annual leave including public holidays Employee who has worked for 13 weeks annual leave plus public holidays Employee who has worked for 13 weeks annual leave including public holidays Employee who has worked for 13 weeks annual leave plus public holidays qualifies for 3 weeks paid qualifies for 3 weeks paid qualifies for 4 weeks paid qualifies for 4 weeks paid

Which of the following must be satisfied for an employee to claim wrongful dismissal? The employer terminated the contract without notice, and was not justified in doing so The company must have at least 12 months continuous employment The dismissal was not for reasons of conduct, capability, redundancy or some other substantial reason (i) only (i), (ii), and (iii) (i) and (ii) (iii) only Which of the following reasons is not an automatically unfair reason for dismissal? An employees refusal to work in contravention of the Working Time Regulations 1998 An employees protected disclosure An employees pregnancy An employees gross misconduct N commences employment under a three year contract with A limited on 01. 08. 2006, on 30 06 2009 he is given notice that the
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contract is not to renewed. Assuming that he has a case, what claims may he bring against A Ltd? (i) (ii) (iii) (iv) Wrongful dismissal only Unfair dismissal only Redundancy only Redundancy and unfair dismissal only

51

Which of the following statements suggests that John is an independent contractor in relation to the work he carries out for Zed Ltd? He is required to provide his own tools He is required to carry out his work personally and is not free to send a substitute He is paid in full without any deduction of Income Tax (i) and (ii) only (ii) and (iii) only (i) and (iii) only (i), (ii) and (iii) only Which of the following statements is correct? An employer is obliged to provide careful and honest reference. An employer is obliged to provide a safe system of working An employer is obliged to provide employees with smoking facilities during authorised breaks at work. An employer with a fewer than 20 employees is obliged to provide an itemised written pay statement

(i) (ii) (iii) (i) (ii) (iii) (iv) 52 (i) (ii) (iii) (iv)

53 Which one of the following can not justify the dismissal of an employee? (i) (ii) (iii) (iv) 54 (i) The employees incompetence The employees misconduct The employees inability to do the job without contravening a statute. That the employee proposes to join an independent trade union In which one of the following situations is an employee not entitled to time off work? When the employee has given proper notice that he intends to leave, and wants to attend interviews for a new job
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

(ii) (iii) (iv) 55 (i) (ii) (iii) (iv)

When an employee receives proper redundancy notice from the firm, and wants to attend interviews for a new job When the employee is a trade union official, and wants time off to carry out trade union duties When the employee is in training as his companys safety representative seeks time off to attend a course. Which one of the following is an employer today always bound to do? Give a testimonial to an employee who ask for one when he or she wishes to leave Insure himself against possible occupational safety liability to employees Pay wages to an employee during absence for illness Prohibit smoking indoors

56

L plc carries out a business using both employees and independent contractors. It is important for L plc to be able to distinguish between its employees and its independent contractors for a number of reasons. Which of the following is not correct? Employees owe statutory occupational safety duties to employees but not to independent contractors Employees have a right not to be unfairly dismissed, but this does not apply to independent contractors H plc must deduct income tax and National Insurance contribution from the wages of its employees, but not from the amounts paid to independent contractors H plc must give statutory notice of detailed terms of work to part time employees but not to independent contractors Three of the following grounds for dismissal are automatically unfair. One might be unfair, but not automatically. Which one? The employees proposed in his or her own time to take part in the activities of an independent trade union The employee had become pregnant but could still have done her job until antenatal care was needed The employee complained to the employer that the latter was breaking a statutory health and safety provision The employee was secretly working part time for another company

(i)

(ii)
(iii) (iv)

57
(i)

(ii)
(iii) (iv)

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58

Various tests have been developed for the purpose of distinguishing between employees and independent contractors. Which one of the following is not an identifiable test applicable? The The The The control test liability test organization test economic reality test

(i) (ii) (iii) (iv) 59 (i) (ii) (iii) (iv) 60

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 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. Which Statement is incorrect? Codes of ethics are voluntary Governance refers to a how an organization is run Social responsibility refers to a companys relationship with its shareholders Law will be implemented if the code of ethics is not practiced
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

(i)
(ii) (iii) (iv)

61
(i)

(ii)
(iii)

(iv)
62 (i) (ii) (iii) (iv)

63 (i)

Which Statement is correct? 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 Which of the following is correct? 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. In which of the following does a director owe duties of care and skill? The public at large The companys creditors The Shareholders (i) only (ii) only (i) and (ii) only (iii) only

(ii)
(iii) (iv) 64 (i) (ii)

(iii)
(iv) 65 (i) (ii) (iii) (i) (ii) (iii) (iv)

66 (i) (ii) (iii) (i) (ii) (iii) (iv)

Which of the following are not represented at board level in the UK? Creditors Shareholders Employees (i) only (i) and (ii) only (iii) only (i) and (iii) only
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

67 (i) (ii) (iii) (iv) 68 (i) (ii) (iii) (i) (ii) (iii) (iv) 69 (i) (ii) (iii) (iv) 70 (i) (ii) (iii) (iv) 71 (i) (ii) (iii) (iv) 72 (i) (ii)

Which of the following types of committees is not recommended by the Combined Code? Planning Committee Nominations Committee Remunerations Committee Audit Committee Which of the following are examples of unitary board structure? An all executive board A majority executive board A majority non executive board (i) only (i) and (ii) only (ii) and (iii) only (i), (ii) and (iii) In contract of employment, which of the following cannot be restrained after the contract end? Future employment specified in the contract by restraint of trade clause Use of specified confidential information Disclosure of specified trade secrets Use of special skills acquired during the employment Which of the following would not help accountants to act in the public interest and with social responsibility? 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 Acting with integrity Which of the following is not true of ethical guidelines and standards? Ethical guidelines and standards encourage good practice Accountants are required by law to follow ethical guidelines and standards CIMA members must adhere to CIMAs Code of Ethics CIMA members must adhere to the International Federation of Accountants (IFAC) Code of Ethics. Which of the following is not the case? The CIMA Code of Ethics takes an ethically based approach The IFAC Code of Ethics takes a compliance based approach
Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

(iii) (iv) 73 (i) (ii) (iii) (iv) 74 (i) (ii) (iii) (iv) 75 (i) (ii) (iii) (iv)

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 Which of the following is not the case? Professional accountants must keep themselves up to date professionally because: 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. One of your colleagues has provided information that you believe he knows to be misleading. If you are correct, this violates CIMAs fundamental principle of: Integrity Objectivity Professional Competence and due care Confidentiality CIMA has a Code of Ethics for Professional Accountants because the code Provides evidence that accountants behave ethically at all times Provides a basis for complaints or cases under CIMAs 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

Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law

Rumy Sakkaf Findamentals of Ethics, Corporate Governance & Business Law