Check Real CIMA P3 Exam Question for Free (2023) [Q45-Q62]

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Check Real CIMA P3 Exam Question for Free (2023)

Get Ready to Boost your Prepare for your P3 Exam with 287 Questions

NEW QUESTION 45
H sells machinery and also associated services, such as advice and repairs. H’s industry is going through considerable transformation.
Classify each of the examples of information available to H’s management as strategic, operational or of having little value.

NEW QUESTION 46
CH makes a popular type of chocolate bar The bars are made on a production line and are scanned for size and shape as they move along the line Wrong sized and misshapen bars are rejected as being poor quality. The scanner detects 90% of poor quality bars. If CH wants to reduce the risk of poor quality bars being sold to the public it can add a further check by a person scanning the production line as well. this check would detect 80% of poor quality bars If the further check was implemented what percentage of poor quality bars would still get through the checking process?

7.2%

10%

30%

NEW QUESTION 47
CVB is a major chain of pharmaceutical retailers that is quoted on its home stock exchange.
CVB’s Chief Executive Officer (CEO) persuaded a former school friend to join CVB’s Board as Non-executive Chair It is not widely known that the two have been lifelong friends. The Chair tends to defer to the CEO on all matters arising at Board meetings Which of the following statements are correct?
Select ALL that apply.

The Chair should have declared an interest and refused this appointment

The presence of the other non-executives will ensure sound governance

CVB’s shareholders are likely to be misled over the quality of governance

This friendship does not matter because the CEO and Chair would become friends anyway

There will be a major corporate scandal relating to CVB

NEW QUESTION 48
A’s directors do not believe that they always get value for money from their investment in capital projects.
Over the past decade the company has invested in 55 projects that have cost more than $1m. They are considering introducing a system of post completion audit to see if this will help them to understand any problems they have had with projects in the past. They hope to use the results of the post completion audits to significantly improve the results of their capital investments State whether you agree or disagree with the points raised by A’s directors.

NEW QUESTION 49
Why is it potentially useful for an organisation to maintain a risk register?

To ensure that recognised risks are adequately managed.

To ensure that there are no undiscovered risks.

To eliminate all recognised risks.

To provide the risk manager with a role.

NEW QUESTION 50
James owns a small company which sometimes suffers from credit risk.
Which of the following measures should he put in place to help reduce this risk?

Introduce credit checks for new customers.

Reduce the company bank loans.

Pay suppliers’ invoices quicker.

Look for a loan with a lower interest rate.

NEW QUESTION 51
TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.
TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF’s cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:
TRF purchased the Big machine, but annual requirements only exceeded 600,000 once, in year 3, when 720,000 units of emissions were emitted.
Calculate the amount that the post completion audit shows TRF overpaid for the ownership costs associated with this machine.
Give your answer to the nearest whole $ (in $’000s).

NEW QUESTION 52
DFR is an online retailer that sells picture frames The software running on DFR’s website enables customers to log in and make purchases by inputting an email address as a user name and a password that must contain at least eight characters, including upper and lower case letters, numbers and punctuation marks (e.g. £, $ or!) Once logged in, customers can check previous orders that they have placed.
Customers can also use DFR’s website to change personal details, including credit card numbers and delivery addresses Whenever they wish to use those facilities, the software sends a text message containing a six-digit number to their mobile phones They must input that number before the system will accept changes to their personal details Which TWO of the following statements are correct?

It is illogical to have different security measures in place for orders and for access to personal details.

The software treats customers’ personal details as being more sensitive than their ordering histories

The arrangement with the text message will have no effect on the security associated with changing personal details

Customers should be able to update the mobile phone numbers in their DFR accounts using only their email addresses and passwords for access

The software should never show the whole of a customer’s credit card number on screen, even if the customer has logged in and input the six-digit number.

NEW QUESTION 53
ABC produces fashion garments for sale m its chain of high street retail outlets.
Which THREE of the following activities would result m the organisation having to review its cyber security risks management program?

ABC is introducing a loyalty bonus store-card for regular shoppers

ABC is introducing online shopping for certain limited ranges of clothing

ABC has acquired an overseas garment manufacturer

ABC has announced year-on-year trading figures with 5% increase

ABC is shipping the new season range of fashionwear to the retail outlets

ABC’s sales figures show strong seasonal bios

NEW QUESTION 54
TTO is seeking to recruit a new non-executive director TTO produces high quality women’s clothing, which it sells to retailers Some clothing is sold under the retailer’s own brand names, some is made on behalf of recognised clothing designers TTO is a well regarded company and its products are of a very high quality.
Several applications have been received, and the Board is seeking to make a shortlist by eliminating unsuitable candidates Which THREE of the following would make a candidate unsuitable for appointment to the post?

Having been employed by TTO as a senior sales manager until two years ago.

Being the brother of the finance director

Holding the view that business is over regulated and company directors too heavily constrained by legislation

Not having experience in fashion retail

Being an executive director of a company where TTO’s CEO is a non-executive director.

NEW QUESTION 55
VBN’s home currency is the V$. On 1 January, VBN must make a payment of C$2 million on 31 March of that same year.
On 1 January the spot exchange rate was V$1 = C$0.4.
On 1 January VBN paid $180,000 for a call option to buy C$2 million for V$5.5 million on 31 March. VBN’s cost of borrowing was 8% per year.
On 31 March the spot rate was V$1 = C$0.45.
What was the total cost, including the cost of the option, of settling the payable?

V$4.628 million

V$5.684 million

V$4.444 million

V$5.5 million

NEW QUESTION 56
Match the descriptions shown in the boxes below with the method of quantifying risk exposure it best describes.

NEW QUESTION 57
P Ltd manufactures and sells electrical goods through retail outlets.
N is P Ltd’s Sales Director. He has been recently promoted from a senior sales position with P Ltd. He has been forced to spend the first six months as Sales Director on dealing with an administrative mess left behind by the previous sales director.
You are a Senior Management Accountant at P Ltd. You have worked with N for many years.
N has worked hard and has made many changes that have brought significant benefit to the business.
N has asked you to postpone the recording of some purchase invoices so that he will meet his quarterly targets on profit margin.
What should you do?

Collect all the facts, distance yourself from the situation but say nothing.

Write up the facts of the issue and put it on your files.

Document the situation and present the facts to your manager.

Do nothing, no rules have been broken, tell N that you cannot do as he asks and that he needs to abide by the professional codes.

NEW QUESTION 58
The internal audit department should always give a report at the end of its audit. This report is intended to be useful and help the company going forward. The report should always include any recommendations for improvements. Which of the following statements are true and which are false?

NEW QUESTION 59
A publicly funded hospital has put various features in place in an attempt to improve strategic control and create an improved control environment.
Which TWO of the following features are most likely to meet this objective?

An Audit Committee consisting of five independent persons with expertise in finance, human resources, and medicine.

A strict policy of capping the maximum salary payable to any employee at 110% of the average earned by that category of employee in the country in which the hospital is located.

The setting up of a Risk Management Committee to examine the strategic risks applicable to the entity and to formally report on a quarterly basis.

Ensuring that all medical staff are aware that their first priority should be to discharge patients as quickly as possible at all times so as to minimise wasting hospital resources.

Ensuring that the Head of Internal Audit examines and authorises all expense claims by hospital staff.

NEW QUESTION 60
Laura is an accounts clerk. She is supposed to sign each invoice as evidence that she has conducted checks against supporting documents. Sometimes Laura signs invoices without making these checks.
Terry is a member of the internal audit team. Terry has been told to conduct compliance tests on whether Laura is checking the invoices properly.
Which of the following would give Terry a false sense of assurance that Laura’s checks have been operating?

Terry examined a sample of invoices to make sure that they had been signed by Laura. All had been signed.

Terry worked at a spare desk in the accounts department and quietly watched Laura without telling her.
She checked every invoice carefully while Terry was present.

Terry selected a sample of purchase invoices and compared each to the supporting documents that Laura is supposed to review. Every one of Terry’s invoices was supported by the related documents.

Terry asked Laura a series of open-ended questions about the operation of the purchases system. She did not mention anything about detailed checks of invoices against documents.

Terry reviewed a sample of invoices for purchases of plant and equipment and found that Laura had not signed them. Laura explained that she believed that those were authorised by someone else, although the accounts manual indicates that it was her responsibility.

NEW QUESTION 61
S is a senior production manager for LK, which is about to set up a new production line requiring S4 million of new specialist equipment.
S’s daughter goes to school and is friends with the daughter of R. the sales manager in GG. GG is a potential supplier of the specialist equipment that LK requires.
R owns a holiday home. S’s daughter regularly accompanies R’s daughter on family vacations at this holiday home, all at R’s expense.
S is the only person working for LK who is qualified to select the specialist equipment. GG will definitely bid for the sale.
What should S do?

S should permit GG to bid, but should insist that R should not be involved.

S should declare an interest and withdraw from the assessment process.

S should exclude GG from the bidding process.

S should declare an interest, giving details of his daughter’s friendship with R’s daughter, but should participate fully in the assessment process

NEW QUESTION 62
D plc is a public relations company. Shares in D plc have recently been listed on the UK stock exchange.
D plc has an internal audit department that reports to the Chief Executive Officer (CEO). The CEO is considering outsourcing internal audit to an audit firm, which would not be the firm that conducts D plc’s external audit.
Identify THREE advantages to D plc of outsourcing internal audit in this way.

Doing so may improve independence.

Decisions relating to internal audit can be based solely on cost.

Internal audit will have a better understanding of D plc’s objectives and culture.

Specialist skills may be more readily available.

Risk of staff turnover is passed to the outsource company.