Summer Certification Limited Time 70% Discount Offer - Ends in 0d 00h 00m 00s - Coupon code = getmirror

Home
CIMA
CIMA Strategic
P3
Risk Management Questions and Answers

Pass the CIMA Strategic P3 Questions and answers with ExamsMirror

Practice at least 50% of the questions to maximize your chances of passing.

Exam P3 Premium Access

View all detail and faqs for the P3 exam

Go to Exam

819 Students Passed

84% Average Score

93% Same Questions

Viewing page 3 out of 11 pages

Viewing questions 21-30 out of questions

Questions # 21:

D's Board has been advised by the auditors that D's control environment is weak and should be improved. Which TWO of the following measures will help to improve the control environment?

Options:

The Board will put in place a fraud policy

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

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

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

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

Answer

A, E

Questions # 22:

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?

Options:

To look for weaknesses in other peoples' systems

To look for solutions in response to threats.

To look for signs that BCD's system has been breached

To look for weaknesses in BCD's cyber security system.

Answer

Questions # 23:

H Ltd is a company providing postal and courier services to small businesses. Customers pay a monthly or annual subscription fee to use the service, plus a very small fee for each item delivered.

A year ago, H employed a new sales team. Their remuneration is dependent on the number of new customers they sign up. Sales increased dramatically in the first six months, but now difficulties are emerging such as new customers dropping their subscription once the initial period has expired; subscriber direct debits being returned unpaid; subscribers going out of business and other similar issues.

Which of the following would be appropriate to help resolve these problems?

Options:

Alter the pricing structure in order to increase the price for sending each item but decrease the subscription element of the fee.

Ensure that a credit check is carried out before a subscriber is accepted.

Reduce the rate of commission payable to any sales person who fails to sign up at least an agreed minimum number of customers each month.

Alter the commission arrangements so that commission is payable only when the subscriber signs up for a second year.

Preparing a monthly report for sales persons detailing the performance of each new customer they have signed up over the previous year.

Answer

B, D, E

Questions # 24:

P Ltd manufactures and sells electrical goods through retail outlets.

N is P Ltd's Sales Director. He has been recently promoted from a senior sales position with P Ltd. He has been forced to spend the first six months as Sales Director on dealing with an administrative mess left behind by the previous sales director.

You are a Senior Management Accountant at P Ltd. You have worked with N for many years.

N has worked hard and has made many changes that have brought significant benefit to the business.

N has asked you to postpone the recording of some purchase invoices so that he will meet his quarterly targets on profit margin.

What should you do?

Options:

Collect all the facts, distance yourself from the situation but say nothing.

Write up the facts of the issue and put it on your files.

Document the situation and present the facts to your manager.

Do nothing, no rules have been broken, tell N that you cannot do as he asks and that he needs to abide by the professional codes.

Answer

Questions # 25:

RFD, a listed company, is considering making an investment in a risky new venture. RFD has a substantial cash surplus that will be used to acquire the necessary resources. It is unlikely that RFD would have been able to raise finance for this investment because the company is already highly geared.

Which of the following statements about stakeholders' conflicting interests are true?

Options:

RFD's shareholders are exposed to the systematic risk from this project and the directors are exposed to total risk.

RFD's lenders are likely to suffer a greater risk than RFD's equity investors.

Neither RFD's shareholders or lenders are likely to have the means to prevent the directors from making this investment.

RFD's existing employees are likely to enjoy a significant upside risk from this project.

The diversification of RFD's interests will reduce the risks for all stakeholders.

Answer

A, B, C

Questions # 26:

H sells machinery and also associated services, such as advice and repairs. H's industry is going through considerable transformation.

Classify each of the examples of information available to H's management as strategic, operational or of having little value.

Question # 26

Options:

Answer

Answer:

Questions # 27:

A publicly funded hospital has put various features in place in an attempt to improve strategic control and create an improved control environment.

Which TWO of the following features are most likely to meet this objective?

Options:

An Audit Committee consisting of five independent persons with expertise in finance, human resources, and medicine.

A strict policy of capping the maximum salary payable to any employee at 110% of the average earned by that category of employee in the country in which the hospital is located.

The setting up of a Risk Management Committee to examine the strategic risks applicable to the entity and to formally report on a quarterly basis.

Ensuring that all medical staff are aware that their first priority should be to discharge patients as quickly as possible at all times so as to minimise wasting hospital resources.

Ensuring that the Head of Internal Audit examines and authorises all expense claims by hospital staff.

Answer

A, C

Questions # 28:

THG is a quoted company that manufactures expensive clothes that are sold to upmarket department stores THG's Board has commissioned a stress test to identify the impact of strategic risks The consultant who is conducting the test is currently investigating the impact that a 1 % increase in interest rates would have on THG.

Which TWO of the following are valid reasons for including an increase in interest rates in the stress test?

Options:

Stress testing was first developed for bank supervision.

THG might change its prices if interest rates rise

Many of the retailers who resell THG's clothes are highly geared

THG is highly geared.

Interest rates affect consumers' disposable income

Answer

D, E

Questions # 29:

A Firewall is an element of a company's Information Technology infrastructure.

Which THREE of the following are characteristics of a Firewall?

Options:

A Firewall determines the boundary of the "Trusted" components of the company's Information Technology infrastructure.

A Firewall protects sensitive data against accidental or malicious damage.

A Firewall protects the computer suite against physical attack.

A Firewall protects against unauthorised network access.

A Firewall protects against viruses.

A Firewall can screen every message coming into or out of the company network looking for key words, or attachments.

Answer

A, D, F

Questions # 30:

C Ltd is a private, family-owned company which is hoping to become listed on a recognised Stock Exchange within the next two years. At the moment, the Board of Directors comprises five directors; four of whom are from the founding family and all of whom are involved in the day-to-day running of the business. The remaining director obtained a seat on the Board three years ago as a condition of an investment by a venture capital fund.

The Board meets in half-day sessions once a fortnight and the Board meetings are reasonably well run. All decisions are taken by the Board as a whole. There are no sub-committees.

Which of the following steps would it be appropriate for C Ltd to take in the light of the proposed listing?

Options:

Appoint enough independent non-executive directors (NEDs) that they make up at least 50% of the Board.

Appoint one of the NEDs as Chair of the Board.

Insist that the venture capital company director be removed as he is not necessarily motivated to act in the best interests of C Ltd.

Set up at least three sub-committees namely remuneration, nomination, and audit committees.

Ensure that the current executive directors are given 10 year contracts starting on the day the company is floated, to ensure consistency and continuity in the management of the company.

Set up an "agenda setting" sub-committee consisting of the current executive directors to decide the agenda for each Board meeting.

Answer

A, B, D

Viewing page 3 out of 11 pages

Viewing questions 21-30 out of questions