April 2026 CPA Introduction to Law and Governance Past Paper answers

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CERTIFIED PUBLIC ACCOUNTANTS (CPA) CERTIFIED SECRETARIES (CS)
CERTIFIED CREDIT PROFESSIONALS (CCP) FOUNDATION LEVEL
INTRODUCTION TO LAW AND GOVERNANCE
TUESDAY: 21 April 2026. Morning Paper. Time Allowed: 3 hours.

This paper consists of five (5) questions. Answer ALL questions. Marks allocated to each question are shown at the end of the question. Do NOT write anything on this paper.
QUESTION ONE
(a) In relation to the law of contract, explain the following terms:

(i) Invitation to treat. (2 marks)
(ii) Counter-offer. (2 marks)

(b) With reference to the sources of law in Kenya, summarise FOUR advantages of written law over customary law.
(4 marks)

(c) Outline FOUR roles of the government in relation to corporate governance in your country. (4 marks)
(d) Analyse FOUR essential features of arbitration as an alternative dispute resolution (ADR) mechanism. (8 marks)
(Total: 20 marks)

QUESTION TWO
(a) Distinguish between “real property” and “personal property”. (4 marks)

(b) Outline SIX characteristics of a good law. (6 marks)

(c) Enumerate SIX rules governing revocation of an offer. (6 marks)
(d) Edith Atieno ordered 120 cartons of bottled water from Lilo Traders at Sh.1,500 per carton. The seller delivered 140 cartons and demanded payment for all 140 cartons.

Required:
(i) Identify TWO options available to the buyer under the Sale of Goods Act where a seller delivers a larger quantity than ordered. (2 marks)
(ii) Summarise TWO remedies available to the seller if the buyer wrongfully refuses to pay for cartons accepted. (2 marks)
(Total: 20 marks)

QUESTION THREE
(a) Distinguish between “natural persons” and “artificial persons”. (4 marks)

(b) Explain THREE factors used to determine domicile of a person in Kenya. (6 marks)

(c) Kevin Mutua employed Lucy Chebet as a delivery rider. While delivering parcels using Kevin Mutua’s motorcycle during working hours, Lucy Chebet negligently hit a pedestrian, David Kilonzo, causing serious injuries.
Required:
(i) Identify the party liable for the injury suffered by David Kilonzo. (2 marks)

(ii) Explain FOUR reasons to support your answer in (i) above. (8 marks)
(Total: 20 marks)
QUESTION FOUR
(a) Explain TWO actions that could constitute professional misconduct by a professional. (2 marks)

(b) In relation to insurance contracts:
(i) Explain the principle of utmost good faith. (2 marks)

(ii) Summarise FOUR legal effects of amalgamation of insurance companies. (4marks)

(c) Highlight FOUR distinctions between courts and tribunals. (4 marks)
(d) Explain FOUR fundamental principles that a professional accountant should observe to protect public interest.
(8 marks)
(Total: 20 marks)

QUESTION FIVE
(a) With reference to the law of agency, distinguish between “actual authority” and “apparent authority”. (4 marks)

(b) Identify FOUR ways through which an artificial person may be created under the laws of Kenya. (4 marks)

(c) Outline SIX duties of an agent to the principal in an agency relationship. (6 marks)
(d) In relation to partnerships, highlight SIX legal consequences of dissolution of a partnership. (6 marks)
(Total: 20 marks)
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