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CIMA BA4 Exam Questions
BA4 - Fundamentals of Ethics, Corporate Governance and Business Law (Page 7 )

Updated On: 19-Apr-2026
Page 7 of 102
PDF with 661 Questions

According to the UK Corporate Governance Code, who is responsible for setting the company's values and standards?

  1. The Chairman
  2. The Board
  3. The Managing Director
  4. The shareholders

Answer(s): B



In relation to the law of misrepresentation, which of the following is correct?

  1. The innocent party is entitled to claim damages under the tort of negligence for all types of misrepresentation.
  2. A person is not entitled to rescind a contract which was induced by an innocent misrepresentation.
  3. A person is only entitled to a remedy under the Misrepresentation Act where the person who made the misrepresentation is a party to the contract.
  4. The Misrepresentation Act may be used to obtain damages for fraudulent misrepresentation.

Answer(s): C



Which of the following correctly describes the circumstances in which directors may be held liable to contribute to the assets of insolvent companies in respect of "wrongful trading"?

  1. Where the directors have the intention of defrauding creditors.
  2. Where directors knew or ought to have known that insolvency was inevitable.
  3. Whenever a company becomes insolvent.
  4. Whenever a company's liabilities exceed its assets.

Answer(s): B



A company's board of directors is found to have committed widespread fraud and engaged in a wide range of unethical practices. Which of the following is the LEAST likely consequence of this?

  1. Insolvency or bankruptcy for the company
  2. Prison sentences for company directors
  3. Loss of credibility
  4. A significant rise in the company's share price

Answer(s): D



Which ONE of the following was NOT a recommendation of the Cadbury Committee Report 1992?

  1. Independent non-executive directors should be appointed to the boards of listed companies
  2. An audit committee consisting of a majority of non-executive directors should be established to oversee the company's finances
  3. Executive directors should not be offered service contracts for more than five years unless approved by the shareholders in a general meeting
  4. The remuneration packages of executive directors should be agreed by a remuneration committee wholly or mainly comprising non-executive directors

Answer(s): C



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