Chartered Institute of Management Accountants (CIMA) Ethics, Governance and Sustainability Syllabus

Ethics, Governance and Sustainability syllabus — full chapter and topic list

Expand any chapter to see its topics and sub-topics. This is the whole examinable outline for Ethics, Governance and Sustainability in Chartered Institute of Management Accountants (CIMA), not a summary of it.

1. 1

   CGMA Code of Ethics

   3 topics

   • Fundamental principles
     • Integrity, objectivity and professional competence
     • Confidentiality and professional behaviour
   • Conceptual framework approach
     • Identifying, evaluating and addressing threats
     • Self-interest, self-review, advocacy, familiarity, intimidation
   • Resolving ethical conflicts
     • Ethical decision-making frameworks
     • Whistleblowing and safeguards
2. 2

   Corporate governance

   3 topics

   • Governance principles and frameworks
     • Agency theory and the separation of ownership and control
     • Board structure, committees and directors' duties
   • Accountability and reporting
     • Comply or explain; transparency and disclosure
     • Stakeholder vs shareholder approaches
   • Regulatory regimes
     • UK Corporate Governance Code and Sarbanes-Oxley
3. 3

   Sustainability and integrated reporting

   3 topics

   • Corporate social responsibility
     • Triple bottom line: people, planet, profit
     • ESG factors and stakeholder responsibility
   • Integrated reporting <IR>
     • Six capitals and value creation over time
     • IFRS Sustainability Disclosure Standards (ISSB)
   • Sustainable finance and accounting
     • Environmental cost accounting
     • Carbon reporting and natural capital

Ethics, Governance and Sustainability flashcards for Chartered Institute of Management Accountants (CIMA)

20 of 51 cards from the Ethics, Governance and Sustainability deck — real questions with worked answers.

1. What are the five fundamental principles of the CIMA Code of Ethics for Professional Accountants?

   Integrity, Objectivity, Professional competence and due care, Confidentiality, and Professional behaviour.

2. Under the CIMA Code of Ethics, what does the fundamental principle of 'Integrity' require?

   To be straightforward and honest in all professional and business relationships; not knowingly being associated with misleading information.

3. What does the fundamental principle of 'Objectivity' require an accountant to do?

   To not allow bias, conflict of interest, or undue influence of others to override professional or business judgements.

4. What two elements make up the fundamental principle of 'Professional competence and due care'?

   Maintaining professional knowledge and skill at the level required to provide competent service, and acting diligently in accordance with applicable technical and professional standards.

5. Does the duty of 'Confidentiality' under the CIMA Code end when the professional relationship with a client ends?

   No. Confidentiality continues even after the relationship has ended; information acquired must not be disclosed or used for personal advantage.

6. What does the fundamental principle of 'Professional behaviour' require?

   Complying with relevant laws and regulations and avoiding any conduct that the accountant knows or should know might discredit the profession.

7. What approach does the CIMA Code of Ethics use to deal with circumstances that may compromise the fundamental principles?

   The conceptual framework (threats and safeguards) approach, rather than a rules-based approach.

8. List the five categories of threats to the fundamental principles identified in the conceptual framework.

   Self-interest, Self-review, Advocacy, Familiarity, and Intimidation threats.

9. In the ethical conceptual framework, what is a 'self-review threat'?

   The threat that an accountant will not appropriately evaluate the results of a previous judgement or service performed by them (or their firm) on which they now rely.

10. In the ethical conceptual framework, what is an 'advocacy threat'?

    The threat that an accountant will promote a client's or employer's position to the point that objectivity is compromised.

11. In the ethical conceptual framework, what is a 'familiarity threat'?

    The threat that, due to a long or close relationship, an accountant will be too sympathetic to others' interests or too accepting of their work.

12. In the ethical conceptual framework, what is an 'intimidation threat'?

    The threat that an accountant will be deterred from acting objectively because of actual or perceived pressures, including attempts to exercise undue influence.

13. What are the two broad categories of safeguards that can reduce ethical threats to an acceptable level?

    Safeguards created by the profession, legislation or regulation; and safeguards in the work environment (created by the employer/firm).

14. What is the three-step structure of the conceptual framework approach to ethics?

    Identify threats to compliance with the fundamental principles, evaluate their significance, and apply safeguards to eliminate them or reduce them to an acceptable level.

15. What is an 'ethical conflict' (ethical dilemma) for a professional accountant?

    A situation in which the fundamental principles conflict with one another, or where the correct course of action is unclear due to competing duties or pressures.

16. Name three factors CIMA suggests an accountant should consider when resolving an ethical conflict.

    The relevant facts; the ethical issues involved; the fundamental principles related to the matter; established internal procedures; and alternative courses of action.

17. If an ethical conflict cannot be resolved internally, what external sources of advice should an accountant consider?

    Seeking advice from CIMA, from legal advisors (on a confidential basis), or, as a last resort, resigning from the engagement or organisation.

18. What is the difference between corporate governance and management?

    Governance is the system by which companies are directed and controlled (the board's stewardship and accountability); management is the day-to-day running of the business by executives.

19. State the classic Cadbury Report (1992) definition of corporate governance.

    "The system by which companies are directed and controlled."

20. What is the 'agency problem' in corporate governance?

    The conflict of interest arising when agents (directors/managers) run the company on behalf of principals (shareholders) but may pursue their own interests instead of the owners'.

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