[May-2023] Get 100% Real Free CIMA Strategic Level Case Study Exam P3 Sample Questions
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The CIMA P3 (Risk Management) certification exam is an essential certification for anyone looking to build a career in risk management. The exam covers a wide range of topics related to risk management and helps candidates to develop the skills and knowledge needed to manage risk effectively in any organization. With the CIMA P3 certification, candidates can demonstrate their expertise in risk management and become highly sought after by employers across the globe.
NEW QUESTION # 56
As part of risk assessment exercise for a low-cost airline you are requested to match the risks listed below with the most approriate method of minimising or dealing with each risk.
Answer:
Explanation:
NEW QUESTION # 57
C is an accounts clerKwho is supposed to sign each invoice as evidence that she has conducted checks against supporting documents Sometimes C signs invoices without making these checks D is a member of the internal audit team He has been told to conduct compliance tests on whether C is checking the invoices property Which of the following would grve D a false sense of assurance that C's checks have been in operation?
Select ALL that appry
- A. asked C 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
- B. D worked at a spare desk in the accounts department and quietly watched C without telling her She checked every invoice carefully while D was present
- C. D reviewed a sample of invoices for purchases of plant and equipment and found that C had not signed them C explained that she believed that those were authonsed by someone else although the accounts manual indicates that it was her responsibility
- D. D examined a sample of invoices to make sure that they had been signed by C AH had been signed selected a sample of purchase invoices and compared each to the supporting documents that C is supposed to review Every one of D's invoices was supported by the related documents
Answer: A,B,D
NEW QUESTION # 58
A capital investment project shows a NPV of £3,450 at a discounted rate of 8% and an NPV of £1,210 at a discounted rate of 9%.
What is the internal rate of return?
- A. 9.54%
- B. 11.85%
- C. 10.85%
- D. 10.54%
Answer: A
NEW QUESTION # 59
L is a specialist deep sea diving company The company specialises in challenging tasks that are often rejected by other companies as being too risky Most assignments are difficult and some are very dangerous L has very experienced divers who are highly trained and are safety conscious In spite of the dangerous work, L has an excellent success rate and is highly sought after L charges very high fees for its work Despite L's precautions, the likelihood of accidents is high and the consequences are also high L has an excellent insurance which has always been very expensive but the price has just been increased by 40% Which of the following is correct?
- A. L should stop accepting these risky contracts.
- B. L should pay the very high insurance premiums demanded by its insurance company
- C. L should diversify into low risk diving contract s.
- D. L should cease trading
Answer: C
NEW QUESTION # 60
E purchases parts for one of the machines it manufactures from Country X Place the risk classification next to the risk it relates to:
Answer:
Explanation:
NEW QUESTION # 61
Select the correct ethical principle that corresponds to each ethical dilemma described.
Answer:
Explanation:
NEW QUESTION # 62
Smalltown had a problem with people parking cars on the town's mam shopping streets instead of in the nearby car parks The parked cars created congestion and made it difficult for delivery vehicles to unload Smalltown's local government had employed traffic wardens to enforce parking regulations by issuing parking fines to motorists who parked for more than the permitted 30 minutes.
The local government took further action to deal with this problem It banned parking on the busiest streets, it introduced parking charges in the remaining streets and it made it free to park m the town's car parks for up to two hours Fewer people now park cars on the streets because of the charges, but those who do generate significant revenues for the local government Fewer traffic wardens are required and so wage costs have reduced The local goverment auditors have decided to carry out a value for money audit of the parking system Which of the following is a measure of effectiveness?
- A. Parking enforcement costs less than before
- B. The remaining traffic wardens are less stressed because they no longer receive abuse by motorists.
- C. The main shopping streets are no longer congested
- D. Revenues from parking have increased
Answer: C
NEW QUESTION # 63
A UK manufacturing company has simultaneously:
* purchased a put option to sell USD 1million at an exercise price of GBP1.00 = USD1.65
* sold a call option that grants the option holder the right to buy USD 1million at a price of GBP1.00 = USD1.61 (this option has the same maturity date as the put).
Which of the following is a valid explanation for entering into these option positions?
- A. The company expects to receive USD 1million from a customer and wishes to obtain an additional benefit if the USD strengthens beyond GBP 1.00 = USD 1.61.
- B. The company expects to pay USD 1million to a supplier and wishes to offset the premium from the call option against the cost of the put option.
- C. The company expects to receive USD 1million from a customer and wishes to offset the cost of the put option by the premium on the call option.
- D. The company expects to pay USD 1million to a supplier and wishes to obtain additional protection against the USD strengthening beyond GBP 1.00 = USD 1.65.
Answer: C
NEW QUESTION # 64
G plc has decided to move its production plant to overseas Country A.
This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the staff would have to move to Country A.
The Production Director has identified that there are some political risks in moving to Country A.
Match the methods of reducing the political risks associated with the move to Country A with the corresponding risks.
Answer:
Explanation:
NEW QUESTION # 65
Which of the following statements are correct?
- A. If a project has high risks it should always be accepted as the rewards will always be high.
- B. Risk can always be transferred to someone else.
- C. It is always possible to remove all risks when undertaking large projects.
- D. If a project has low risks it will usually have relatively low returns.
- E. Risk should be carefully considered when evaluating possible future projects.
Answer: D,E
NEW QUESTION # 66
FBK produces motorbikes for the high end sports market. The company has recently developed a bike that uses a powerful electric motor instead of a petrol engine.
Which of the following are product risks?
Select ALL that apply.
- A. The risk that the different characteristics of an electric engine will make the bike difficult to control
- B. The risk that a bike powered by a quiet electric motor will not create the thrilling engine noise that is prized by traditional riders.
- C. The risk that demand for the bike will exceed production capacity
- D. The risk that the silent running of the bike will create a hazard to pedestrians.
- E. The risk that FBK cannot afford to finance the working capital associated with the launch
Answer: D,E
NEW QUESTION # 67
X has just set up a small public relations company. The company is growing last and already has eight employees. X"s accountant has said she needs to make sure she has good internal controls.
X disagrees and says that there are very few issues that could cause weaknesses in internal control in her type of business.
Which THREE of the following statements are correct?
- A. A small business which has just started up does not need internal controls.
- B. Employees can try to circumvent internal controls
- C. X ill usually be working in the office so there is no risk of any fraud. Therefore, the company does not need internal controls
- D. Only manufacturing companies need internal controls
- E. The employees may feel they are not trusted if more controls are put in place
- F. internal controls could stop the company getting good new clients as it will slow down the process by having more checks in place
Answer: B,E,F
NEW QUESTION # 68
Rio owns an architects business which employs 12 skilled architects and four administrative staff.
The Office Manager has just attended a workshop on internal controls and the way in which they can improve organisations. He intends to implement some internal controls as soon as possible.
What are the limitations of an internal control system in Rio's business?
- A. If Rio does not support the internal control system then the controls may not be adhered to.
- B. Internal controls are only suitable for large businesses.
- C. Employees could ignore the internal controls.
- D. Internal controls will usually mean hiring more staff.
- E. Internal controls may slow down the speed with which the architects can respond to enquiries.
Answer: A,C,E
NEW QUESTION # 69
Which TWO of the following are NOT methods used for risk identification?
- A. Accounting for waste in a manufacturing process
- B. Brainstorming ideas with colleagues from different disciplines within the business
- C. Carrying out interviews on key members of staff
- D. Designing a process to deal with complaints
- E. Employing external advisors with specialist knowledge
Answer: B,D
NEW QUESTION # 70
JHU is a retail chain that has 20 shops JHU's Internal Audit Department has just completed an investigation into the operation of controls over credit card payments by shop customers In 12 cases, the shops were complying with JHU's standard procedures The other 8 shops had serious deficiencies that differed between shops.
The Internal Audit Department has drafted a detailed report on the outcome of the audit visit carried out at each shop, but has not yet submitted them to senior management.
Which TWO of the following statements are correct?
- A. The reports relating to the deficient shops should set a deadline for their systems to be rectified and a follow-up audit visit carried out
- B. The Internal Audit Department should consider editing the concerns arising from the investigation in order to avoid demotivating the shop managers
- C. Draft reports should be discussed with their respective shop managers, who should have the opportunity to comment before the reports are submitted to senior management
- D. All 20 reports should be placed on JHU's intranet so that every shop manager can learn from good and bad practices noted at each shop
- E. It would be a mistake to submit the reports relating to the 12 shops that were in full compliance to senior management
Answer: C,E
NEW QUESTION # 71
SDF is a quoted company that has a large internal audit department.
Which of the following would impair the independence of SDF's internal audit?
- A. Internal audit staff salaries are linked to a company-wide salary scheme.
- B. Junior internal audit staff are recruited directly from university. They spend two years with the company before moving into other departments within SDF.
- C. It is left to the individual members of the internal audit department to report any conflicts of interest associated with a proposed investigation to which they have been assigned.
- D. The head of internal audit reports directly to SDF's chief accountant.
- E. Internal audit staff receive a bonus whenever they discover a compliance error.
Answer: B,D,E
NEW QUESTION # 72
Company X has been advised by its internal audit team that it should have a fraud response policy A is a new member in the internal audit team and he does not see why this would help to prevent fraud and has asked for an explanation Which TWO of the following would be included in this explanation? It would act as a deterrent and help prevent staff from committing fraud
- A. It would be part of the internal control system of the company
- B. It would show that the company is taking the risk of fraud seriously.
- C. It would clarify the role of various staff in detecting fraud
- D. It would lay down processes and procedures that internal audit should follow if they suspect fraud
Answer: A,D
NEW QUESTION # 73
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