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Free CIMA BA4 Practice Exam with Questions & Answers | Set: 6

Questions 76

Which of the following are correct in relation to supervisory and management boards of directors?

1 A supervisory board reports to the mangament board in respect of business policy and future strategy

2 A management board is usually made up entirely of executive directors

3 A supervisory board includes employee representatives.

Options:
A.

2 only

B.

1 and 2 only

C.

2 and 3 only

D.

1 only

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Questions 77

Which of the following is correct?

i. A company intending to issue new shares for cash must first offer them to the existing shareholders.

ii. A company may dispense with the requirement to offer new shares to existing shareholders by passing a special resolution.

iii. A company issuing shares for a non-cash consideration is not required to offer the shares to the existing members first.

Options:
A.

(i) only

B.

(ii) only

C.

(ii) and (iii) only

D.

(i), (ii) and (iii)

Questions 78

Which of the following is incorrect in relation to the remedy of liquidated damages?

Options:
A.

A liquidated damages clause will be void if it amounts to a penalty clause.

B.

A liquidated damages clause will apply where it is a genuine attempt to pre-estimate the loss caused by a breach of contract.

C.

If a liquidated damages clause is held to be void, the innocent party cannot claim on a quantum meruit basis.

D.

If a liquidated damages clause is found to be reasonable, the amount specified must be claimed, even if it is less than the actual loss caused by the breach.

Questions 79

In which of the following countries are employees represented at board level?

i. Germany.

ii. United States of America

iii. France.

Options:
A.

(i) only

B.

(i) and (ii) only

C.

(i) and (iii) only

D.

(iii) only

Questions 80

Which of the following is an advantage of carrying on a business through the medium of a private company limited by shares?

Options:
A.

The ability to carry on business without holding an annual general meeting

B.

The fact that business can be earned on with a minimum of one company secretary.

C.

The ability to keep the articles of association private

D.

The fact that business can be carried on with a minimum of two directors

Questions 81

Lotl is a well-known supermarket chain that has recently come under fire for not encouraging diversity within the organisation.

Because of this, it has been making efforts to make the business more diverse.

Which of the following are ways Lotl might do this?

Select ALL that apply.

Options:
A.

Encourage people from all backgrounds and cultures to apply for vacancies.

B.

Ensure that it offers equal opportunities to both able-bodied and disabled people.

C.

Ensure that the company has an even split of male and female employees at all levels.

D.

Import and sell food from all over the world.

E.

Ensure that their in-store signs are written in at least five different languages.

Questions 82

The IFAC has eight main drivers of sustainable corporate success. Which of the following are included in the eight mam drivers?

1, Innovation and adaptability

2. Effective leadership and strategy.

3. Board control and responsibility

Options:
A.

1 only

B.

2 and 3 only

C.

1 and 2 only

D.

2 only

Questions 83

Why are the principles of integrity, objectivity, professional competence and due care, confidentiality and professional behavior “fundamental”?

Options:
A.

Because they are the foundations of reasoning and professional practice

B.

Because they are the foundations of human rights

C.

Because they are the foundations of corporate responsibility

D.

Because they are the foundations of management accounting

Questions 84

Which ONE of the following resolutions is no longer legally effective?

Options:
A.

An elective resolution

B.

A special resolution

C.

An ordinary resolution

D.

A written resolution

Questions 85

Which of the following is INCORRECT in relation to the recommendations of the Greenbury Committee Report of 1995?

Options:
A.

All the recommendations were incorporated into the Stock Exchange Listing Rules.

B.

Directors should never be given discounted share options.

C.

Annual bonuses should not be pensionable.

D.

Any long-term incentive schemes to be offered to directors should first be approved by the shareholders.  

Questions 86

Which of the following most accurately describes the ratio decidendi?

Options:
A.

It is a statement of law by a court which is binding on all higher courts which are called upon to decide a similar case.

B.

It is a statement of law by a court which is not binding on lower courts which are called upon to decide a similar case.

C.

It is a statement of law by a court which is binding on all lower courts which are called upon to decide a similar case.

D.

It is a statement of law by a court which is binding on all future courts which are called upon to decide a similar case.  

Questions 87

In the UK, the body responsible for reviewing the regulatory activities of the professional accountancy bodies is:

Options:
A.

The Professional Oversight Board for Accountancy

B.

The International Federation of Accountants

C.

The Financial Reporting Council

D.

The Financial Review Board

Questions 88

What has been the root of the majority of recent corporate scandals?

Options:
A.

Misapplication or ignoring of ethical values

B.

Misapplication or ignoring of accounting principles

C.

Misapplication or ignoring of regulations

D.

Misapplication or ignoring of human rights

Questions 89

Your boss knows that you will always strive to deliver a project on time and on budget. Which TWO of the personal qualities identified by the CIMA Code of Ethics does this demonstrate?

Options:
A.

Reliability

B.

Courtesy

C.

Timeliness

D.

Respect

Questions 90

Which of the following are examples of an invitation to treat? Select ALL that apply.

Options:
A.

Goods on display in a shop window.

B.

A billboard advertisement

C.

Goods on display on a supermarket shelf.

D.

A street vendor who offers a passerby a bunch of bananas for £1.

E.

A man who offers to sell his car for £1500 to a potential buyer.

Exam Code: BA4
Certification Provider: CIMA
Exam Name: Fundamentals of Ethics, Corporate Governance and Business Law
Last Update: Sep 13, 2025
Questions: 661

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