CIMA BA04 Exam 2022 Questions and Answers

here is an important difference between 'ethics' and 'morals' - ANSWER Morals resolve problems with reference to the individual's personal, religious or political beliefs about what might be right or wrong. Personal, re ...

here is an important difference between 'ethics' and 'morals' - ANSWER Morals resolve problems with reference to the individual's personal, religious or political beliefs about what might be right or wrong. Personal, religious, political or other morality is not directly relevant to a system of professional ethics. Ethics can be stated as answering the question, 'What can I do for the best?' The key elements are: 'I', because ethics are about your individual professional responsibility to act. 'do', because ethics are about practical courses of action in the real world. 'best', because ethics are not about doing what is right or wrong, but often involve making choices between courses of action. The CIMA Code of Ethics and the IFAC Code aim to - ANSWER identify the nature of the personal responsibility that the Management Accountant takes on. provide guidance on how to identify the practical situations where particular care might need to be taken. provide general guidance on how to address difficult ethical questions. A professional accountant is required to comply with the following fundamental principles - ANSWER Integrity Objectivity Professional competence and due care Confidentiality Professional behaviour In the UK, the ethical lead for financial reporting has been taken by the - ANSWER Financial Reporting Council 1. UK versions of intl standards on auditing 2. uK kversion of intl financial reporting standards Conduct Committee: provides independent oversight of professional disciplinary issues; monitoring bodies, audit quality, corporate reporting, discipline, regulation of accountants/actuaries Formal compliance - ANSWER means following the letter of the law, staying just inside it, but doing no more than the minimum required to keep out of trouble. Actual compliance - ANSWER means seeking to achieve the underlying purpose, which oftenmeans going beyond the minimum necessary. 7 principles of public life - ANSWER Selflessness Integrity Objectivity Accountability Openness Honesty Leadership In June 2005, IFAC published their Code of Ethics for Professional Accountants which was prepared by their - ANSWER ethics committee In 2006, the CIMA Code of Ethics for Professional Accountants was launched, based on IFAC's - ANSWER code for professional accountants The Code of Ethics is split into three parts with a list of definitions at the end. - ANSWER A. General Application of the code B. Professional accountants in public practice C. professional accountants in the business The concept of competent professional service is regarded as one of the fundamental principles in the CIMA Code of Ethics, where the professional accountant has the duty to maintain - ANSWER professional knowledge and skillset CIMA has developed the CIMA Professional Development framework which addresses - ANSWER the requirements on members and the institute regarding CPD. the ways in which CIMA is supporting members in their professional development. The particular qualities and virtues sought are - ANSWER reliability, responsibility, timeliness, courtesy and respect and these are taken from the IFAC publication International Education Standard (IES4)-Professional Values, Ethics and Attitudes (effective from January 2005). A professional accountant is required to comply with the following fundamental principles - ANSWER Integrity Objectivity Professional competency and due care Confidentiality If a threat to objectivity is identified, safeguards should be considered and applied to eliminate or reduce the threat to an acceptable level. Such safeguards could include - ANSWER Withdrawing from the engagement Introducing more supervision into the process Terminating the relationship giving rise to the threat Discussing the issue with the higher management and those reviewing the governance of the client relationship Professional competence implies - ANSWER knowledge, skill, diligent delivery and an awareness of all the relevant issues in performing tasks. The two key attributes to independence - ANSWER 1. of mind 2. in appearance Corporate Responsibility - ANSWER is the outward manifestation of an ethical policy he circumstances where professional accountants are, or may be, required to disclose confidential information or when such disclosure may be appropriate include the following - ANSWER Disclosure is permitted by law and is authorised by the client or the employer. Disclosure is required by law. Disclosure is a part of professional duty when not prohibited by law. The CIMA Code of Ethics takes what is called a - ANSWER framework based approach - but rather provides steps to identify, explain and solve problems. It is an acceptance that just saying what you should not do in general theory is not always very helpful when dealing with immediate practical problems. The framework approach is common in the accounting profession because it helps practitioners, rather than merely directing them. virtue ethics - ANSWER ethical school of accountancy profession virtues are dispositions to act in ways that benefit both the person possessing them and that person's society deontological - ANSWER humans are bound from a knowledge of their duty as rational beings, to obey the categorical imperative to respect other rational beings utilitarianism - ANSWER guiding principle of conduct should be the greatest happiness or benefit of the greatest number business ethics - ANSWER application of ethical principles to the problems typically encountered in a business setting types of threats - ANSWER self interest self review familairity intiimidation advocacy intl federation of accountants (IFAC) - ANSWER intl body represenitng all major accountancy bodies across the world protect public interest by developing high quality intl standards, promoting strong ehtial values and encouraging quality practic IFAC's intenrational ethics standards board for accountants (IESBA) - ANSWER independent standard setting board that develops and issues, in the public interest, high quality ethical standards and other prpnouncmeents for profes accountants worldwide Code of Ethics for Professional Accountants support, debate Corporate social responsibility - ANSWER refers to how an organisation manages its relationships in the wider community the continuous commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as the local community and society at largef Three things are essential in developing an effective ethics programme: - ANSWER Active leadership from the top—a senior member of the organisation's board should act as a champion and organisations should encourage all Senior Executives to lead by example. To get buy-in—this is best done through consultation, information and encouraging transparency of decision-making. Programme of training—everyone covered by the code should embed the message. In identifying ethical dilemmas, it is important to understand how they arise. The tensions exist because of differing sources of value. The sources are as follows: - ANSWER Society—through the legislative process Individuals—through their personal values Professional bodies—through the norms they set Companies—through the codes of ethics laid down for their staff to follow The stages of investigation in resolving ethical dilemmas are - ANSWER Establish the relevant facts Identify the ethical issues Test the issue against the Fundamental Principles and Code of Ethics Once the relevant facts have been ascertained, then a course of action will need to be identified. Some of the options are as follows: Do nothing Avoidance Modifying behaviours Arbitration In many organisations, the procedures laid down for resolving ethical issues will refer to three initial tests for an ethical decision. - ANSWER Transparency Effect Fairness corporate governance. - ANSWER The attempts to effectively control the remuneration of directors and the activities of directors in their management of public companies so as to avoid high-profile scandals are known as s broadly concerned with the interaction between, on the one hand, the management of listed companies and the desire of directors to produce wealth for themselves and the shareholders and, on the other hand, the impact of management structures and decision making on stakeholders. effective control, business efficacy and accountability of the management of public listed companies for the benefit of stakeholders. Company law is made up of - ANSWER ethical principles and standards of behaviour which legislators and the courts have thought it right and proper to enshrine within the law of the land. UK Corporate Governance Code - ANSWER contains codes of best practice which do not have the force of law. in UK all companies quoted on stock must comply in annual report 1. leadership 2. effectiveness 3. accountability 4. renumeration 5. relations with shareholders In theUnited States corporate governance issues arose first in the 1980s when - ANSWER company boards adopted protective measures to ward off what they considered to be undesirable takeover bids. The collapse of such a large corporation as Enron and the criminal activities revealed led to renewed attention being given to the effectiveness of corporate governance measures. The Sarbanes-Oxley Act was passed in July 2002 seeking to - ANSWER protect investors by improving the accuracy of corporate disclosure and reporting procedures and increasing corporate openness. The Sarbanes-Oxley Act created the Public Company Accounting Oversight Board which is charged with the task of policing the auditing of public companies in the United States. the European Union established an EUCorporate Governance Forum in October 2004 with the objective to - ANSWER co-ordinate corporate governance efforts of member states'. believed didn't necessary to formulate sep code The Cadbury Committee Report (1992): - ANSWER t recommended that the boards of public companies should be required to comply with a code of best practice as a condition of continuing to be listed on the Stock Exchange. The Greenbury Committee Report (1995) - ANSWER It contained a new code of best practice for the directors of public listed companies.