The CIMA BA4: Fundamentals of Ethics, Corporate Governance and Business Law exam is often underestimated. While it doesn’t involve calculations, it requires strong technical knowledge, careful reading of questions and the ability to apply principles to practical scenarios.

In this guide, we’ll explain what the exam covers, how it’s structured, why it matters for your career, the main challenges students face and practical tips to help you pass first time.

What does the BA4 exam cover?

The BA4 syllabus is split into four main areas:

A. Business ethics and ethical conflict (30%)

This section introduces the nature of ethics and how ethical principles apply in different business situations. You’ll look at the responsibilities of businesses and the accounting profession, and how policies and organisational values promote appropriate behaviour. You’ll also be expected to recognise and respond to ethical dilemmas.

B. Corporate governance, controls and audit (45%)

This is the largest part of the exam. It focuses on:

• The role and responsibilities of the board of directors
• Principles of good corporate governance
• Internal controls and risk management
• The purpose of internal audit
• The requirement for external audit and what auditors look for when testing controls and transactions.

C. Legal system, contract and employment law (15%)

Here you’ll cover the general principles of the legal system and the essential elements of a valid contract. This includes how contracts are formed, their key terms and remedies for breach. You’ll also study employment contracts and related legal obligations.

D. Company administration (10%)

This topic introduces different types of companies and business structures, particularly limited companies, along with their advantages and disadvantages and basic administrative requirements.

What is the exam structure?

The BA4 assessment is:

• A two-hour computer-based exam
• 85 compulsory objective test questions
• Each question may have one or more parts

You can expect a mix of question styles, including:

• Multiple choice
• True/false
• Matching pairs of text or graphics
• Sequencing and ranking
• Labelling diagrams
• Single and multiple numeric entry

All questions are marked automatically, so precision and careful reading are essential.

Why is BA4 important for your career?

Although BA4 is an entry-level paper, the knowledge it develops is fundamental throughout your CIMA studies and professional life.

• Ethics underpins every CIMA exam and is central to the role of a professional accountant. BA4 helps you build confidence in dealing with real-life ethical dilemmas.
• Corporate governance is particularly relevant if you aim to work in senior finance or management roles, especially in larger or listed companies.
• Audit and internal controls knowledge is useful in most finance roles, helping you understand what auditors expect and how organisations prevent fraud and safeguard assets.
• Corporate social responsibility and sustainability are becoming increasingly important, with new roles such as environmental or carbon accountant emerging.
• Legal knowledge, including contract, employment, anti-bribery and anti-corruption regulations, supports compliance and sound business decision-making.

What are the main challenges with BA4?

Many students are surprised to learn that the pass rate is around 57%. Common difficulties include:

• Underestimating the paper – it may be descriptive, but it is highly technical and detailed.
• Limited practical experience – many students are early in their careers and may not have worked with auditors or senior management.
• Dry terminology – concepts such as agency theory and governance models need to be memorised and clearly understood.
• Complex legal content – contract law includes many nuances and evolves through case law, which can be difficult to absorb.
• Lack of exposure to governance in practice – without seeing how boards operate, it can be harder to visualise their role and responsibilities.

How to overcome these challenges

1. Learn collaboratively

Even though BA4 is theory-based, studying with others can make a big difference. Study groups and online forums allow you to:

• Hear how concepts apply in different workplaces
• Test your understanding by explaining topics to others
• Stay motivated and accountable.

This approach often makes abstract topics like ethics and governance more relatable and memorable.

2. Practise questions continuously

Don’t wait until you’ve finished the full syllabus. Start practising objective test questions as soon as you complete each chapter.

Regular practice helps you:

• Identify gaps in your knowledge early
• Learn how CIMA phrases questions
• Understand how small wording changes affect the correct answer.

You’ll often learn more from questions you get wrong than those you get right, as reviewing the explanation reinforces the underlying theory.

3. Focus on application, not just definitions

While some terms must be memorised, many questions test how principles apply in real situations – such as spotting an ethical threat or identifying when a contract is legally formed. Always ask yourself how the rule would work in practice.

4. Build confidence through repetition

The more objective test questions you complete, the more familiar the exam style will become. This reduces exam-day nerves and helps you manage your time more effectively.

Example exam question

Question

S offers to sell his car to B for £10,000 cash. At what point in time does the contract come into being?

A. When B accepts the offer

B. When B pays S the £10,000

C. When the agreement is written down

D. When the agreement is signed

Correct answer: A

A legally enforceable contract is formed when four elements are present:

• Offer
• Acceptance
• Consideration
• Intention to create legal relations

In this example, the offer is S proposing to sell the car for £10,000. The contract is formed when B communicates acceptance of that offer.

Payment of the £10,000 is the consideration, but it is not required for the contract to exist (option B). The agreement does not need to be written down or signed to be legally binding, so options C and D are incorrect.

Final thoughts

BA4 rewards consistent study, careful attention to detail and plenty of question practice. Treat it with the same seriousness as your numerical papers and focus on understanding how ethical, governance and legal principles apply in real business situations.

With the right preparation, it’s a highly achievable exam and an important foundation for the rest of your CIMA journey.