CIMA Risk Management - P3 Exam Practice Test

A. The Board will meet annually to discuss the report from the external auditors.

B. The Board will appoint an additional accountant in the Finance Department.

C. The Board will put in place a fraud policy

D. The directors will have special rules for claiming expenses and will not have to follow the procedures in place for all staff

E. The sales managers will encourage the sales team to increase sales by 50% in the next six months.

A. No one method of capital appraisal taken alone is adequate to evaluate competing projects.

B. Net Present Value evaluation considers a range of different discount rates considering different risk factors and finance methods.

C. Decisions should only consider the financial implications of the project.

D. The time value of money should be the same for all similar competing projects.

E. All projects should be evaluated using sensitivity analysis.

F. Opportunity cost is only relevant when capital is scarce.

A. A supplier with a long history of providing outsourcing services

B. A supplier who can act as its agent in choosing the cheapest options

C. A supplier who can act as a partner in considering all its business needs

D. A supplier who has facilities conveniently located close to its headquarters

E. A supplier who provides a wide range of services

A. The Audit Committee should decide annually whether it needs an internal audit function.

B. The Audit Committee should provide arrangements for whistle blowing.

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 design the system of internal controls.

F. The Audit Committee should engage consultants to carry out business reviews.

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

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

C. Risk of staff turnover is passed to the outsource company.

D. Doing so may improve independence.

E. Specialist skills may be more readily available.

A. All information on the system can be accessed easily from outside the university through the internet.

B. The system can link seamlessly with the system used by the university for processing financial transactions and producing financial statements.

C. The system has been demonstrated to operate with a degree of accuracy at least as good as the existing system and as good as that used by similar universities.

D. The system is capable of being run in parallel with the current system so as to have the opportunity to examine and overcome any unforeseen difficulties that might arise.

E. The system has the capacity to deal with all existing records and all new records to be created in the foreseeable future.

A. W plc shall insist on an exclusivity agreement with each supplier so that identical products are not available from other outlets.

B. W plc shall endeavour to adhere to the terms of its contracts with its suppliers at all times.

C. W plc shall keep confidential all information received from suppliers and potential suppliers.

D. W plc shall endeavour to take as high a percentage of each supplier's output as possible.

E. W plc shall not use its buying power unscrupulously.

F. W plc shall continuously remind suppliers that it always has several alternative suppliers to choose from.

A. Taking up references from previous employers.

B. Checking that the engineers have a professional engineering qualification.

C. Checking that the engineers do not belong to a union.

D. Having a defined fraud policy statement that includes recruitment issues.

E. Checking that the engineers have previous experience in a similar business.

A. Everyone will agree the meaning of high, medium and low

B. High, medium, low will eliminate subjectivity

C. Quantifying probabilities as percentages gives greater scope for describing risks

D. High, medium and low will be easier to use

E. Using percentages will be more scientific

A. $1million

B. -$0.2million

C. $4.8million

D. -$5million

A. Big data has the potential to identify ways in which DFG can increase sales.

B. The big data approach may help DFG to price contract bids more accurately.

C. Big data has the potential to identify ways in which DFG can reduce construction costs.

D. It would be unethical for DFG to use big data in order to compete even more effectively with its rivals.

E. DFG should supplement its existing databases in order to enhance the benefit from big data.

A. Customers first input a password and then receive an access code via email or text message that also has to be input

B. Customers must input a valid user name and then input a password user name first input a password and then a pin number

C. Customers first input a password and then use a card or token to gain access

D. Customer passwords must contain both letters and numbers and must be changed regularly.

A. Management has just revisited the annual budget and made it much harder to achieve in order to try and boost profits

B. Management did not have time to carry out all the staff appraisals this year but all staff have received a pay increase instead

C. The Finance Director has just been given a place on the audit committee to increase the committee's financial knowledge

D. Managers have good job descriptions that define their roles in the organisation clearly

E. The Board has just issued an ethical code