Practice CIMAPRO19-P03-1-ENG Exam Online

Question 1

WhichTHREEof the following are principles of good corporate governance according to the UK Corporate Governance Code?

A : Leadership

B : Reliability

C : Remuneration

D : Honesty

E : Accountability

Answer: A,C

Question 2

KLtdisan on-line travel agency specialising in budget package holidays to a small number of popular locations. The holidays that it sells are made up of a 'package' of flights, hotel accommodation and food. K Ltd's Finance Director is concerned that the company'sscope of operation is too narrow and wishesto diversify.

IdentifyTWOactions that K Ltdshould take immediately.

A : Set up a number of activity holidays; adventure, sports and trekking for example.

B : Bulk book cruise accommodation and create a special package deal for retired couples.

C :

Expand the number of locations it currently serves.

D : Re-image the locations it currently serves to make them more exotic and family friendly.

E : Review the customer base looking at feedback, repeat sales and single visit statistics.

F : Engage market researchers to look at future trends in holiday requirements.

Answer: A

Question 3

The management of U isreviewing internal controls throughout the company. Ithasnoted the following:-

1. In the trade receivables section, journal adjustments are made by the clerks, without any reference to their supervisor. Journal adjustments may relate to sales returns, discounts allowed, or transfers between accounts.

2. In the purchasing department, the purchasing manager selects and approves all suppliers, astheyarethe only person with sufficient experience to do so. They usea very limited number of suppliers becausethey can rely on these suppliers to provide goods of the quality required at a competitive price. They donot keep any documents in relation to negotiations with other potential suppliers or other quotes obtained.

In relation to the above, which of the following statements are valid?

A : The fact that the purchasing manager uses a very small number of suppliers is, in itself, a sign of poor internal controls.

B : It is acceptable for clerks in the trade receivables section to make journal adjustments without authorisation provided the amounts involved are not material to U's financial statements.

C : It is acceptable for clerks in the trade receivable section to make journal adjustments without authorisation, provided they have no access to cash receipts.

D : The fact that the purchasing manager does not keep documentation relating to negotiations with suppliers, or potential suppliers,is evidence that they are involved in fraudulent activity.

E : Clerks making journal adjustments without reference to their supervisor is evidence of inadequate separation of duties.

F : The way the role of purchasing manager is carried out in U increases the chance that the company will fall victim to fraudulent activity.

Answer: A

Question 4

With regard to the rote of the audit committee which of the following statements are correct? Select ALL that apply

A : The audit committee should design the system of internal controls

B : The audit committee should decide annually whether it needs an internal audit function

C : The audit committee should decide annually whether it needs an external audit function

D : The audit committee should review and monitor the effectiveness of the company's internal audit function

E : The audit committee should provide arrangements for whistle blowing

F : The audit committee should engage consultants to carry out business reviews

Answer: A,D

Question 5

Which method of quantifying risk exposure can be used to calculate the maximum loss on a portfolio occurring within a period of time with a given probability?

A : Value at Risk

B : Regression analysis

C : Simulation

D : Expected value

Answer: D

Name:	P3 Risk Management
Exam Code:	CIMAPRO19-P03-1-ENG
Certification:	CIMA Professional Qualification
Vendor:	CIMA
Total Questions:	278
Last Updated:	Apr 23, 2024

CIMA CIMAPRO19-P03-1-ENG