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Viewing page 10 out of 14 pages

Viewing questions 136-150 out of questions

Questions # 136:

An independent audit is important to readers of financial statements because it

Options:

assures the readers of financial statements that any fraudulent activity has been corrected

confirms the accuracy of management's financial representations.

measures and communicates the data included in financial statements

objectively examines and reports on management's financial statements

Questions # 137:

S is management accountant for a small construction company. The company's financial year is due to end in a few weeks. The company has a number of large construction projects, one of which is behind schedule. One of the directors of the company has asked S to raise an invoice for a progress payment that is due on completion of the next phase of the contract. S knows that this phase will not be complete until after the year end, but the director says that the client needs the invoice now, to allow them to process it in time for payment when the phase is complete.

Which THREE of the following would it be appropriate for S to do?

Options:

Do as requested

Challenge the request

Ask for confirmation in writing from the director

Refuse

Bring the matter to the attention of the managing director

Ask for advice from the company's external auditors

Questions # 138:

Natthapong's toilet won't flush, so he hires a plumber to come over and fix it.

He tells the plumber what the problem is, and the plumber agrees to fix it.

However, once the builder supposedly finishes the job, Natthapong finds that it still won't flush.

Is he able to terminate the contract?

Options:

Yes - The plumber did not fix the toilet and so the offer cannot be accepted.

Yes - He is able to terminate the contract at any time, even if the plumber did fix the toilet.

No - Once he's offered the plumber the job he is unable to terminate the contract.

No - Even if the plumber hasn't fixed the toilet he has still given up his time and effort and should therefore be paid.

Questions # 139:

Which of the following statements are correct in relation to an offer?

1. An offer may be made to the whole world

2. An offer cannot be withdrawn until the offeree has had the opportunity of accepting or rejecting the offer.

3. An item in a shop window marked "Special Offer" is not an offer in law.

Options:

1 and 2 only

1 and 3 only

1 only

2 only

Questions # 140:

L is a senior management accountant in a large and respected firm. He has found out that two of the partners of the firm are working unethically for clients who operate on 'the wrong side of the law'. L would like to draw this matter to the attention of the third partner, but he is concerned that he will either lose his job, or, if the scandal gets out, the firm will lose its reputation and clients as a result. He decides to do nothing. Is this an unethical thing to do?

Options:

Yes - it is the ethical duty of an accountant not to cover anything up

Yes - it is unethical to work for a firm like that

No - he is protecting the reputation of the firm

No - he is protecting his own job and the jobs of everyone in the firm

Questions # 141:

Which of the following best describes "independence of mind" as referred to in CIMA's Code of Ethics

Options:

It separates a professional accountant from the rest of society

It ensures a professional accountant always tries to avoid any action which discredits the profession.

It permits the expression of a conclusion without being affected by influences that compromise professional judgement

It ensures a professional accountant is straightforward and honest in all professional and business relationships

Questions # 142:

Which of the following requires the approval of 75% of all the company's shareholders who are entitled to vote?

Options:

A written special resolution

A special resolution

A written ordinary resolution

An ordinary resolution

Questions # 143:

Which of the following is a common law remedy?

Options:

Damages

An injunction

Specific performance

Rescission

Questions # 144:

In the tort of negligence what is meant by “res ipsa loquitur”?

Options:

The tort is actionable without proof of loss or damage.

The facts speak for themselves.

The damage is too remote.

The defendant does not owe a duty of care to the claimant.

Questions # 145:

A Ltd is under contract to manufacture machinery for B Ltd for £200,000. Which of the following is a valid excuse for A Ltd failing to complete the contract on time?

Options:

A Ltd's factory was flooded.

A Ltd had taken on too many orders and had to give priority to its regular customers.

A Ltd's employees went out on strike.

A number of A Ltd's key workers were absent through illness.

Questions # 146:

Which of the following is correct?

Options:

The shares of all public limited companies are quoted on the Stock Exchange.

The company secretary of a public limited company must be qualified.

A private limited company must have at least two shareholders.

A public limited company cannot trade until it has paid up share capital of at least £50,000.

Questions # 147:

In relation to registering a company limited by shares, which of the following is correct?

Options:

If the promoters fail to submit Articles of Association to the Registrar of Companies, the company cannot be registered.

If the promoters fail to submit Articles of Association to the Registrar of Companies, the provisions of Table A automatically apply.

If the promoters fail to submit Articles of Association to the Registrar of Companies, the documents will be returned to the promoters with a request for Articles to be submitted.

If the promoters fail to submit Articles of Association to the Registrar of Companies, the company will be registered but will have no Articles of Association applicable to it.

Questions # 148:

Which of the following statements are correct regarding companies'?

1. Both public and private companies must have a minimum amount of share capital before they can commence trading.

2. The shareholders of both public and private companies cannot interfere in the management of the company.

3. The minimum number of directors for both public and private companies is two

Options:

1 only

2 and 3 only

1 and 2 only

2 only

Questions # 149:

Which of the following is correct?

(i) The purpose of the criminal law is to regulate behavior within society.

(ii) The purpose of the civil law is to enable injured persons to obtain a remedy against the wrongdoer.

(iii) A breach of the criminal or civil law can result in the defendant being fined.

Options:

(i) only

(i) and (ii) only

(ii) only

(i), (ii) and (iii)

Questions # 150:

Andrea is completing an audit on the finance department for a medium-sized company. In her report she makes note of the fact that her audit was severely limited due to her being unable to access many of the

department's documents.

Because of this and a number of other things she's discovered whilst conducting her audit, she thinks fraudulent activity might have been taking place within the department.

However, Andrea knows that it is not the business of auditors to seek out fraud.

What should she do?