CIMA CIMAPRA19-P03-1-ENG P3 Risk Management (Online) Online Training
CIMA CIMAPRA19-P03-1-ENG Online Training
The questions for CIMAPRA19-P03-1-ENG were last updated at Nov 20,2024.
- Exam Code: CIMAPRA19-P03-1-ENG
- Exam Name: P3 Risk Management (Online)
- Certification Provider: CIMA
- Latest update: Nov 20,2024
M, a manufacturing company, has had some problems with defects in one of the main products it produces. This product has been made by the company for many years and is very profitable. Last month it had over 300 defects reported by customers which is more than 15% of products sold. This is a reputation risk for M and is also affecting profitability.
Which of the following controls could M introduce to reduce defects and also increase profitability?
- A . M could increase the number of quality control staff.
- B . M could introduce a procedure where quality control staff sign a form at the end of each day to say they have examined 1 in 10 products for defects and they are satisfied with the quality.
- C . The production director could examine one in every 10 products and sign a form to say they are satisfactory.
- D . M could service machinery at least once a month as recommended by the machinery supplier.
- E . M could check all employees qualifications to ensure they are qualified for their jobs.
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 . CW has just opened a bank account in the currency in which the newly opened branch is now operating
- B . Establishing an internal audit department
- C . 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
- D . 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
- E . 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
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 data corruption for different user groups in the mall
- B . NCM allows ZZ to provide different service levels 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 prevent scanners being used on the public WiFi for different user groups in the mall
- E . NCM allows ZZ to restrict traffic for different user groups in the mall
- F . NCM allows ZZ to stop malware from being spread for different user groups in the mall
Achieving the budget is often used as a good performance measure. However, there are problems with budgets which may mean they are not always good measures of performance.
Which TWO of the following statements about budgets suggest that they should not always be used to measure performance?
- A . Budgets may deliberately be set too low by managers so they are easily achieved and make the manager look good.
- B . Budgets are a commitment. They therefore act as a constraint on doing anything different.
- C . Budgets can be used to motivate staff if they are set correctly.
- D . Budgets can give people goals to achieve and if everyone strives to achieve these goals the whole organisation will benefit.
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
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 are only suitable for large businesses.
- B . Employees could ignore the internal controls.
- C . If Rio does not support the internal control system then the controls may not be adhered to.
- D . Internal controls may slow down the speed with which the architects can respond to enquiries.
- E . Internal controls will usually mean hiring more staff.
Which of the following represents the greatest risk associated with introducing a system of post-completion audit for investment projects?
- A . Decision makers may be deterred from taking responsible risks.
- B . The entity will realise that its approach to project appraisal is flawed.
- C . The audit itself will waste time.
- D . The entity may withdraw from a project without good cause.
UJK manufactures garden machinery. The company is dependent upon another manufacturer for the motors that power its products.
One of the factors that is being considered in a stress test requested by UJK’s Board is the possibility that the motor manufacturer increases its selling prices by 10% The motor accounts for a significant proportion of the overall manufacturing cost of UJK’s products
Which of the following are correct?
- A . The motor manufacturer should be contacted and told that a substantial increase in selling prices would have a drastic impact on UJK
- B . The possibility of an increase in selling prices due to increased costs should be noted in the stress test report
- C . UJK should estimate the impact on demand of increasing selling prices to pass on the increased cost of the motors.
- D . The impact of absorbing the increased cost of motors on UJK’s profits should be calculated.
- E . UJK should identify an alternative vendor of suitable motors as part of its stress test
The board of OKN is considering an investment opportunity that will require the company to borrow a large amount in month 10 of the current financial year and to invest it immediately in property, plant and equipment. This investment has a positive net present value that justifies the risk, but the directors are reluctant to invest in the project.
Why might the directors be reluctant?
- A . The return on capital employed for the year will be reduced if the investment is made.
- B . The return on capital employed for the year will be increased if the investment is made.
- C . The year’s profit will be depressed by the amount of the investment.
- D . Future profits will be depressed.
Which THREE of 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
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