Get CIMA P3 Dumps Questions Study Exam Guide Jan 28, 2024 [Q20-Q43]

Get CIMA P3 Dumps Questions Study Exam Guide Jan 28, 2024

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NEW QUESTION # 20
A patient has been prescribed a new medicine by their physician. The medicine is accompanied by a leaflet describing potential adverse effects associated with taking it. Most of these potentially adverse effects are trivial, but the leaflet states that three patients in every 10,000 who take the medicine suffer a severe reaction requiring urgent medical attention.
Which of the following statements is true?

• A. The patient should not be concerned because only those few patients who are susceptible to this reaction are at risk.
• B. Statistical probabilities mean very little in themselves when dealing with decisions that could have serious consequences, such as whether to take this medicine.
• C. Statistically, the medicine is safe.
• D. The patient should ignore the risk because there is only a 0.03% risk of a severe adverse reaction.

Answer: B

NEW QUESTION # 21
K is a large mining company. In its risk report it states that there is a risk of accidents and injury because of the nature of the industry. It states that it has staff training in place and complies with all Health and Safety regulations but in spite of this there will still be a residual risk that accidents and injuries may occur.
Which of the following statements are correct?

• A. The shareholders should not invest because there is still a residual risk.
• B. Some risks cannot be eliminated.
• C. Accepting a residual risk does not imply the company is reckless.
• D. The directors are avoiding their responsibilities by saying there is a residual risk.
• E. Most companies in this industry will say something similar in their risk report.

Answer: B,C,E

NEW QUESTION # 22
SDF has a variable rate loan of $100 million on which it is paying interest of LIBOR + 2%.
SDF entered into a swap with CV bank to convert this to a fixed rate 7% loan. CV bank charges an annual commission of 0.3% for making this arrangement.
Calculate the net payment from SDF to CV bank at the end of the first year if LIBOR was 3% throughout the year.
Give your answer in $ million, to one decimal place.

Answer:

Explanation:
$2.3 million

NEW QUESTION # 23
DFG is the largest bridge-building company in its home country, H.
DFG works exclusively for the government of country H and the government awards DFG 80% of the contracts to build new bridges.
DFG's directors are considering using the big data approach to identify opportunities to increase sales revenues and profit.
Which of the following statements are true?

• A. DFG should supplement its existing databases in order to enhance the benefit from big data.
• B. Big data has the potential to identify ways in which DFG can reduce construction costs.
• C. It would be unethical for DFG to use big data in order to compete even more effectively with its rivals.
• D. Big data has the potential to identify ways in which DFG can increase sales.
• E. The big data approach may help DFG to price contract bids more accurately.

Answer: A,B,E

NEW QUESTION # 24
An IT security consultant has been asked to conduct a forensic analysis of a client's systems after the discovery of a system breach The consultant discovered several fake user accounts that appeared to have been created by the perpetrators of the breach Before deleting the accounts, the consultant took care to copy as much detail as possible concerning the accounts.
Which TWO of the following are valid explanations for the consultant's decision to copy the details concerning the fake accounts'?

• A. The analysis of the accounts might help the consultant understand the motive for the breach.
• B. The client could use the account details to target a breach of the perpetrator's systems.
• C. The consultant can charge more for the time spent analysing the fake accounts.
• D. If the fake accounts reappear after deletion that will be a warning that the breach has recurred.
• E. The details could be of value as evidence in any subsequent criminal trial.

Answer: A,E

NEW QUESTION # 25
CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW has ten branches located in its home country and has just opened a foreign branch for the first time It has recently made some changes to the structure and implementation of its control system.
Which TWO of the following changes would be most likely to improve the overall control system?

• A. Establishing an internal audit department
• B. Excess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments
• C. CW has just opened a bank account in the currency in which the newly opened branch is now operating
• D. A policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register
• E. Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches

Answer: A,E

NEW QUESTION # 26
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. Employees can try to circumvent internal controls
• B. Only manufacturing companies need internal controls
• C. The employees may feel they are not trusted if more controls are put in place
• D. X ill usually be working in the office so there is no risk of any fraud. Therefore, the company does not need internal controls
• E. A small business which has just started up does not need internal controls.
• 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: A,C,F

NEW QUESTION # 27
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.

Answer:

Explanation:

NEW QUESTION # 28
A government department is conducting a value for money audit on a school.
The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.

Answer:

Explanation:

NEW QUESTION # 29
Which of the following statements concerning the role of the Audit Committee is correct?

• A. The Audit Committee should provide arrangements for whistle blowing.
• B. The Audit Committee should review and monitor the effectiveness of the company's internal audit function.
• C. The Audit Committee should decide annually whether it needs an internal audit function.
• D. The Audit Committee should design the system of internal controls.
• E. The Audit Committee should engage consultants to carry out business reviews.
• F. The Audit Committee should decide annually whether it needs an external audit function.

Answer: A,B,C

NEW QUESTION # 30
The Board of Directors of VCX, a state-owned electricity company, includes four executive directors the Chief Executive Officer, the Finance Director the Operation Director and the Technical Director All of the shares in the company vest in the Office of the Minister for Energy, who is entitled to appoint two non-executive directors to the Board It has been alleged that the Minister appoints political "insiders" who have no particular knowledge of. or interest in. the electricity industry There are three further non-executive directors
* L, who spent seven years as Chief Executive of VCX, but retired from that role two years ago,
* M, who spent several years on the Board of a state electricity company in a different country to VCX but who resigned from it before accepting the position with VCX: and
* N, who is a qualified and experienced professional accountant
In relation to best practice in respect of Corporate Governance, which of the following statements are valid?
Select ALL that apply

• A. The Finance Director should be part of the Audit Committee because of her expertise
• B. M and N are both suitable appointees to the Audit Committee
• C. M is unsuitable to be part of the Board because his previous involvement with a similar company in another country is a conflict of interest.
• D. Non-executive directors should be responsible for monitoring the performance of executive management especially with regard to company strategy and objectives
• E. None of the executive directors should be allowed to sit on the Remuneration Committee
• F. L can now be considered to be an independent non-executive director

Answer: B,D,E

NEW QUESTION # 31
Amber selects appropriate suppliers and places purchase orders.
Brian passes invoices for payment and submits payment instructions to the bank.
Chris checks incoming inventory and unpacks goods from their containers.
Dirwan posts purchase invoices and files invoices and supporting documents.
Which member of staff could most easily commit fraud?

• A. Brian
• B. Chris
• C. Amber
• D. Dirwan

Answer: A

NEW QUESTION # 32
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. Internal controls will usually mean hiring more staff.
• B. Employees could ignore the internal controls.
• C. Internal controls may slow down the speed with which the architects can respond to enquiries.
• D. If Rio does not support the internal control system then the controls may not be adhered to.
• E. Internal controls are only suitable for large businesses.

Answer: B,C,D

NEW QUESTION # 33
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?

• A. V$4.628 million
• B. V$5.5 million
• C. V$4.444 million
• D. V$5.684 million

Answer: A

NEW QUESTION # 34
The senior manager in the accounts department is going on annual leave for three weeks and Jo, a supervisor is being put in charge of the department for that time.
Which TWO of the following statements are correct?

• A. Job interviews for an office junior should be cancelled until the senior manager returns.
• B. Jo should not have all of the same authority as the senior manager
• C. Authorisation of exceptional overtime due to the year end which takes place while the senior manager is on leave should be postponed until the senior manager returns
• D. The annual staff appraisals should be postponed until the senior manager returns
• E. Authorisation of expenses should wait until the senior manager returns.

Answer: C,D

NEW QUESTION # 35
The government health service in country H employs well over 100,000 staff in various locations throughout the country. Traditionally, local management has had high levels of autonomy in relation to personnel issues and there are several different human resources (HR) managers located across various regions.
The government has decided to introduce a completely new HR/payroll information system to have just one database containing all relevant information about every staff member on the payroll (start date, job title, salary and all other details) and to use this information to begin streamlining recruitment and HR policies.
The government has outsourced the system's development to a reputable company.
Which of the following are disadvantages associated with this IT project?

• A. There is a risk that the system will not capture all of the existing terms and conditions of staff, thus leading to industrial relations problems later.
• B. Any initial problems in running the system could have serious repercussions as it could lead to, for example, staff not being paid, payroll tax not being properly collected, and similar difficulties.
• C. There is a risk that significant anomalies in the current system will be highlighted.
• D. The amount of data storage space required to run the system may not be available.
• E. The system could make it more difficult to employ specialist medical staff on terms and conditions which are different from the normal terms and conditions available.
• F. The government is very heavily dependent on the contractor to whom this assignment is outsourced and if they do not to perform as required this could have serious consequences.

Answer: A,B,F

NEW QUESTION # 36
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.

Answer:

Explanation:

NEW QUESTION # 37
Which of the following statements are true of residual risk?

• A. Residual risk has to be accepted.
• B. Residual risk should never be accepted.
• C. If residual risk is too great then the company should not expose itself to the risk situation.
• D. Residual risk is the risk that remains after risk mitigation has taken place.
• E. Residual risk may be accepted if management feels the company can bear the risk.

Answer: C,D,E

NEW QUESTION # 38
TDC is a company which runs gas-fired power stations in western Europe. The Risk Committee has just received a report that a power station built to the same design and specification in a developing country has recently collapsed. The causes of the collapse are unclear but the consequences for TDC would be catastrophic if something similar were to happen in Europe Which of the following actions being considered by the Risk Committee are ethical?
Select ALL that apply

• A. Attempt to increase the level of insurance cover against this type of eventuality
• B. Send experts employed by TDC to the site of the collapse so that they can gather information first hand on what happened
• C. Commission a reputable firm of structural engineers to carry out a review of all power stations owned by TDC
• D. Decide that the information available to date is too uncertain to take any action for now
• E. Draw up contingency plans in case some of TDC's power stations need to be shut down
• F. Issue a press release confirming that all TDC's power stations are "entirely safe'.

Answer: B,C,E

NEW QUESTION # 39
Which of the following statements best explains why a corporate treasury department should be established as a cost centre rather than a profit centre?

• A. There is no way for the Treasury Department to generate revenue.
• B. The Treasurer should not have a great deal of responsibility.
• C. The Treasury Department should not be encouraged to speculate.
• D. The Treasurer has the ability to manipulate the Department's reported profit.

Answer: C

NEW QUESTION # 40
GHJ is a manufacturing company that insures against the financial costs associated with industrial injuries involving staff. The Health and Safety Office is part of GHJ's Operations Department. GHJ's insurers will automatically increase the insurance premium by 10% in the event of a claim against the policy.
Which TWO of the following are correct?

• A. Linking the risks associated with industrial injuries will overcomplicate the management of those risks.
• B. The risk that a serious accident could impair the morale of uninjured staff is related to the financial risk associated with accidents.
• C. The risk of an increase in the cost of injury insurance cover should be made the responsibility of the company's finance function
• D. The automatic increase in the insurance premium is part of the financial risk associated with industrial injuries.
• E. The insurance cover means that management need only be concerned with the possibility of a 10% increase in the premium m the event of a serious accident.

Answer: C,D

NEW QUESTION # 41
A junior sales clerk at BCD, a wholesale jewellers, received an email which appeared to be from a well known parcel delivery company informing her that a delivery had been attempted outside office hours and had consequently failed She was asked to click on a link and complete some seemingly innocent but logical questions to effect the delivery on the next day She thought no more about it but was very surprised the next month to be awarded salesperson of the month as her sales had doubled Unfortunately, on investigation it was found that this was as a result of several fraudulent orders for high-value items that had seemingly been placed by an existing customer but delivered to a new address, which turned out to be a temporary box number The existing customer's credit card had been fraudulently charged for these orders Which of the following types of cyber-attack had the sales clerk been a victim of?

• A. Botnets
• B. Malvertising
• C. Trojan
• D. Ransomware

Answer: B

NEW QUESTION # 42
ABC has recently appointed a Chief Information Officer who has announced that he wants to start a major clean up starting with all desktop and laptop equipment.
Which THREE of the following measures should be adopted to help enhance security'?

• A. Make an employee of the month award for whoever spots the most bogus emails.
• B. Automate anti-virus update processes so they cannot be avoided
• C. instruct all staff not to click on any links in emails from anyone outside the company
• D. Set up a hot line in the service desk for any security queries.
• E. Make security training available to anyone who wants it.
• F. Issue a corporate policy on email use

Answer: B,C,F

NEW QUESTION # 43
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