[2021] P3 Actual Exam Dumps, P3 Practice Test
Fast2test P3 dumps & CIMA Strategic Level Case Study Exam sure practice dumps
NEW QUESTION 101
Company C wishes to recruit an employee who will have responsibility for, among other things, the receipt and handling of cash. Which THREE of the following would be most likely to provide useful information about the candidate from the point of view of the Internal Auditor?
- A. The candidate's academic qualifications.
- B. References from previous employers of the candidate.
- C. The candidate's personal referees.
- D. Confirmation that the candidate does not have a criminal record.
- E. The candidate's membership of a professional body.
Answer: B,D,E
NEW QUESTION 102
HJK is a retailer, with more than 40 shops around the country. The directors suspect that a serious fraud has occurred at one of the branches and a team of internal auditors has been sent to investigate.
An analytical review investigation shows that sales revenue is in line with budget, but overtime payments to shop staff exceed budget by 20%.
How should the internal audit team proceed?
- A. Increase the evaluation of inherent risk.
- B. Increase the evaluation of control risk.
- C. Conduct additional detailed testing on overtime payments.
- D. Conduct additional detailed testing of all figures.
Answer: C
NEW QUESTION 103
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 104
Company N is considering opening another production plant in Northland, a country 2000 km from its current production plant location N would also sell its products in Northland Which TWO of the following are business risks'
- A. The risk that it may be difficult to sell its products in Northland.
- B. The risk that interest rates may rise making N's loans expensive.
- C. The risk that Northland's government may introduce policies that would be unfavorable to N.
- D. The risk that Northland may not be able to support N's technology requirements.
- E. The risk that the Northland currency may strengthen making it expensive.
Answer: A,D
NEW QUESTION 105
JKL is a retailer with more than 45 shops around the country. The directors suspect that a serious fraud has occurred at one of the branches and a team of internal auditors has been sent to investigate An analytical review investigation shows that sales revenue is in line with budget, but overtime payments to shop staff exceed budget by 20%.
How should the internal audit team proceed?
- A. Conduct additional detailed testing of all figures.
- B. Conduct additional detailed testing on overtime payments
- C. Increase the evaluation of control risk
- D. Increase the evaluation of inherent risk
Answer: B
NEW QUESTION 106
ZZ is a data security company that is responsible for cyber security m a large shopping mall 21 uses Network Configuration Management (NCM) to assist it in meeting the various needs of the mall's user community.
Which THREE of the following are advantages provided by NCM?
- A. NCM allows ZZ to prevent scanners being used on the public WiFi for different user groups in the mall
- B. NCM allows ZZ to prevent data corruption for different user groups in the mall
- C. NCM allows ZZ to segregate traffic for different user groups in the mall
- D. NCM allows ZZ to provide different service levels for different user groups in the mall
- E. NCM allows ZZ to stop malware from being spread for different user groups in the mall
- F. NCM allows ZZ to restrict traffic for different user groups in the mall
Answer: A,C,D
NEW QUESTION 107
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 engage consultants to carry out business reviews
- B. The audit committee should decide annually whether it needs an external audit function
- C. The audit committee should decide annually whether it needs an internal 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 design the system of internal controls
Answer: A,D,E
NEW QUESTION 108
WTW is a global company which produces high-tech equipment such as smart televisions and mobile phones The CFO has just resigned, having been offered a post at a competitor The CFO was well regarded and WTWs share price has fallen in response to the announcement At a board meeting the production director commented that the share price fall is the fault of the nomination committee Which THREE of the following statements are correct?
- A. Most of the members of the nomination committee should be executive directors as they are responsible for ensuring the share price recovers quickly.
- B. When planning the CFO's replacement the nominations committee should consider the diversity of the board
- C. The nomination committee should have considered succession planning for directors before the CFO resigned
- D. The nomination committee should prepare a description of the role and capabilities required for the CFO's replacement
- E. If the nomination committee had been working effectively the CFO would not have resigned
Answer: B,C,D
NEW QUESTION 109
Select the most appropriate level of responsibility for managing each of the following risks.
Answer:
Explanation:
NEW QUESTION 110
BCD has set up a number of functions within its security operations centre (SOC) One of these is a Hunt team.
Which of the following is the primary function of a Hunt team?
- A. To look for signs that BCD's system has been breached
- B. To look for solutions in response to threats.
- C. To look for weaknesses in other peoples' systems
- D. To look for weaknesses in BCD's cyber security system.
Answer: A
NEW QUESTION 111
M is a listed company. It is hoping to invest in a risky new venture. M has a substantial amount of cash to invest in the venture. M would have found it difficult to raise new finance as it has a high level of gearing.
Which of the following statements about stakeholders' conflicting interests are true?
- A. M's credit rating is likely to fall as a result of this new venture.
- B. The directors would only be exposed to the systematic risk from the investment in the new venture.
- C. M's shareholders would only be exposed to the systematic risk from the investment in the new venture.
- D. M's diversification will mean less risk for the shareholders.
Answer: A,C
NEW QUESTION 112
A US company has to pay £500,000 for a new machine.
You have the following information on currencies.
EUR 1 = £1.2300
EUR 1 = USD 1.6200
What is the cost of the machine in USD?
Give your answer to the nearest $.
Answer:
Explanation:
$658501, $658537
NEW QUESTION 113
The list below has duties performed by risk managers and internal auditors. Show who would carry out the duties assuming the company has both risk managers and internal auditors.
Answer:
Explanation:
NEW QUESTION 114
Select the most appropriate level of responsibility for managing each of the following risks.
Answer:
Explanation:
NEW QUESTION 115
W plc is a large international supermarket chain. It has many thousands of suppliers and many thousands of others competing for "shelf space" in its supermarkets.
Which of the following would be appropriate provisions for W plc to include in its Ethical Code in relation to its suppliers?
- A. W plc shall endeavour to adhere to the terms of its contracts with its suppliers at all times.
- B. W plc shall insist on an exclusivity agreement with each supplier so that identical products are not available from other outlets.
- C. W plc shall continuously remind suppliers that it always has several alternative suppliers to choose from.
- D. W plc shall keep confidential all information received from suppliers and potential suppliers.
- E. W plc shall endeavour to take as high a percentage of each supplier's output as possible.
- F. W plc shall not use its buying power unscrupulously.
Answer: A,D,F
NEW QUESTION 116
The Committee of Sponsoring Organisations (COSO) outlined six key principles of Enterprise Risk Management (ERM).
Which of the following are COSO key principles?
- A. The creation of a risk aware culture.
- B. A comprehensive and holistic approach to risk management.
- C. Consideration of risk management in the context of business strategy.
- D. Risk management is the responsibility of the risk committee.
- E. Consideration of the main risk only which is financial risk.
Answer: A,B,C
NEW QUESTION 117
A consultancy firm has many overseas clients The firm's staff are responsible for booking travel and accommodation through an independent travel agent who invoices the firm. There are strict rules governing bookings Staff at all levels must book economy class airfares unless the scheduled flight time is greater than eight hours, in which case they can book a business class seat Hotel accommodation should cost less than $300 per night One of the firm's directors is visiting the consultancy team responsible for a large overseas project The director flew business class, even though the flight took only five hours The director is booked into an executive suite at an expensive hotel at a cost of $900 per night Which TWO of the following statements concerning the director's behavior are correct?
- A. Directors are not required to adhere to company policies in the same manner as more junior staff
- B. The travel agent's invoice should be queried by the consultancy's administrative staff.
- C. Only the staff engaged on this project will be aware of the director's behavior
- D. In future, all staff should be permitted to fly business class and use more luxunous hotels
- E. Staff may be encouraged to book more expensive flights and accommodation in the future
Answer: B
NEW QUESTION 118
YGH has recently completed a post completion audit on a five year contract that has only recently come to a conclusion. The main finding was that the project delivered most of the expected benefits, but that it cost significantly more to implement than had been anticipated at the project appraisal stage. YGH would not have proceeded if the true cost had been known at that stage.
The project was the responsibility of the production department, which is presently managed by G.
When the project was proposed, the production department was managed by H.
H is now YGH's Director of Operations.
How should the finding from this post completion audit be interpreted?
- A. YGH should consider introducing more detailed checking of the assumptions underlying the costs of future projects.
- B. G should be held accountable for the overspend on the project.
- C. H should be held accountable for the overspend on the project.
- D. The production department should not be granted funding for future projects unless there are compelling reasons to proceed.
Answer: A
NEW QUESTION 119
Y plc, a pharmaceutical company, has dealt with a number of risks in the manner indicated below.
Use the TARA framework to classify each of Y plc's responses.
Answer:
Explanation:
NEW QUESTION 120
Company A's gross profit percentage has fallen from 70% to 61 % Which of the following possible explanations would most concern the internal auditors?
- A. There had been an omission of several items from the inventory records
- B. The sales director decided to reduce the selling price to increase the market share
- C. During the year direct wages had been misclassified as indirect manufacturing expenses
- D. During the year the raw material price increased due to an international shortage of the material
Answer: B
NEW QUESTION 121
S, a qualified and experienced professional accountant, has been appointed as a non-executive member of the Audit Committee of X X has recently obtained a listing on the second tier of a reputable Stock Exchange B, the Finance Director, is only worried about the maintenance of proper financial controls and is less concerned with operational controls S has asked A.
The Production Director, to produce regular reports for the Audit Committee on production specification compliance and related issues A is concerned that this means S does not think he is doing his job properly and doubts his integrity In relation to this scenario, which of the following statements are valid?
Select ALL that apply.
- A. If X is not seen to have an effective Audit Committee it will be exposed to increased market risk
- B. A is correct in believing that being asked to report to the Audit Committee in the manner described above suggests a lack of trust in his ability or integrity
- C. The Audit Committee should plan for the receipt of regular reports on production specification compliance and related issues
- D. There is no benefit for X of A producing reports for the Audit Committee unless there are some members on the Audit Committee who have expertise in the production area
- E. B is correct to be more concerned about the maintenance of financial controls because they are inevitably more important than operational controls.
- F. The appointment of an independent professionally qualified and experienced accountant will help strengthen the Audit Committee.
Answer: C,E
NEW QUESTION 122
YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of
$8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs.
The discount rate is 10%.
Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.
- A. 31%
- B. 20%
- C. 13%
- D. 11%
Answer: D
NEW QUESTION 123
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. 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
- B. It would be a mistake to submit the reports relating to the 12 shops that were in full compliance to senior management
- C. The Internal Audit Department should consider editing the concerns arising from the investigation in order to avoid demotivating the shop managers
- 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. 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
Answer: A,B
NEW QUESTION 124
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