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
DRF is a manufacturing company
The internal auditor is conducting an investigation into the operation of the payroll system and has discovered a compliance error
The Head of Human Resources (HR) is required to add any new names to the payroll, using a specific computer password The Head of HR was absent for a month because of ill health During that period a senior member of the Wages Office, who is normally responsible only for organising wage payments, was issued a temporary password in order to add new names to the payroll The password was cancelled when the Head of HR returned to work
Which TWO of the following statements are correct?
- A . The senior member of the Wages Office should be disciplined for being in breach of the rules
- B . The senior member of the Wages Office could have committed fraud
- C . The compliance error should be overlooked because it was as a result of staff absence
- D . The internal auditor should ignore the error because it only lasted for one month
- E . The payroll should be checked thoroughly to ensure that only authorised staff are present
The interest rate on EUR deposits is 7%. The interest rate on GBP deposits is 5%. The spot rate is EUR/GBP0.8500.
What is the one year forward rate predicted to be assuming interest rate parity holds true?
- A . 0.8662
- B . 0.8341
- C . 0.7500
- D . 0.9633
DRAG DROP
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.
CORRECT TEXT
M plc has a $2 million loan outstanding on which the interest rate is reset every 6 months for the following 6 months and the interest is payable at the end of that 6-month period. The next 6-monthly reset period starts in 3 months and the treasurer of M plc thinks that interest rates are likely to rise between now and then.
Current 6-month rates are 7.2% and the treasurer can get a rate of 7.7% for a 6-
month forward rate agreement (FRA) starting in 3 months’ time. By transacting an FRA the treasurer can lock in a rate today of 7.7%.
If interest rates are 8.5% in 3 months’ time, what will the net amount payable be?
Give your answer to the nearest thousand dollars.
Under the COSO Enterprise Risk Management Framework, who is responsible for risk management?
- A . Every member of the entity.
- B . The board of directors only.
- C . Managers and directors only.
- D . The shareholders.
Which of the following is the major advantage of Cloud storage for an enterprise?
- A . It provides unlimited free use for the enterprise
- B . The enterprise has complete control over it
- C . in-house staff are not required to maintain the infrastructure
- D . Sharing storage space with others
Z plc has recently undertaken a SWOT analysis. The SWOT analysis identified two main threats to Z plc:
• The threat that the currency of Z plc’s main overseas competitor weakens compared to Z plc’s home currency.
• The threat that there will be a military coup which will overthrow the government in the country that Z plc purchases most of its raw materials from.
Which TWO of the following categories of risk correspond most closely to the above threats?
- A . Financial risk
- B . Political risk
- C . Business risk
- D . Economic risk
Which TWO of the following are benefits of carrying out a post-completion audit of capital projects?
- A . A post-completion audit can help find out who was to blame for a project exceeding the budget.
- B . A post-completion audit can help management understand what went wrong with a project in order to try and prevent the same problem occurring in the future.
- C . A post-completion audit can help find out where a project went wrong so it can be fixed immediately.
- D . A post-completion audit can investigate variances from the budget on completed projects.
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.
P has decided to invest in a new warehouse at a cost of $2,000,000. The discount rate of the project is 18% and the present value of the tax shield is £26,000.
What is the minimum acceptable Internal Rate of Return of the project?
- A . 18%
- B . 17.77%
- C . 18.23%
- D . 16.50%
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