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What is CIMA P3: Risk Management Exam
CIMA P3 Risk Management Exam is a Certification exam in the Risk Management domain. It is a requirement for people who work in the risk management domain. CIMA P3 Risk Management Exam is an exam that asks you to analyze all risks involved in the company. The professionals that are responsible for this management don't only focus on the financial risks, but they also pay attention to the operational risk, information technology risks, and legal risks. CIMA P3 Dumps include all the relevant information related to this exam, including the most frequently searched content. We have developed the most accurate simulations, so you can practice without any problems.
Salary of CIMA P3: Risk Management Exam
United States: 90,000 USD Europe: 80,000 Euro India: 6,800,100 INR England: 68,500 Pound
NEW QUESTION 92
Multinational companies have a variety of methods by which to manage currency risk.
Select ALL internal hedging methods from the following list.
- A. Matching
- B. Money market hedge
- C. Forward contracts
- D. Leading and lagging
- E. Invoice in home currency
- F. Pooling
Answer: A,D,E,F
NEW QUESTION 93
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. Consideration of risk management in the context of business strategy.
- C. Consideration of the main risk only which is financial risk.
- D. A comprehensive and holistic approach to risk management.
- E. Risk management is the responsibility of the risk committee.
Answer: A,B,D
NEW QUESTION 94
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. The sales director decided to reduce the selling price to increase the market share
- B. During the year direct wages had been misclassified as indirect manufacturing expenses
- C. There had been an omission of several items from the inventory records
- D. During the year the raw material price increased due to an international shortage of the material
Answer: C
NEW QUESTION 95
N, a large company in the food production industry, has grown over the years by the acquisition of several smaller rivals. The company 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 these would be most likely to improve the overall control system?
- A. Establishing an Internal Audit department.
- B. 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.
- C. 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.
- D. 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. - E. N has just opened a bank account in the currency in which the newly opened branch is now operating.
Answer: A,D
NEW QUESTION 96
Which of the following actions would breach CIMA's Code of Ethics for Professional Accountants?
- A. An accountant has been asked to select a new supplier and has decided to recommend a supplier based in country A because that will give the accountant an excuse to visit a family member who lives there.
- B. An accountant has been asked to evaluate an investment opportunity that is open for a very short time.
The accountant has recommended rejecting the opportunity without doing any evaluation because he was too busy to study the proposal properly. - C. An accountant has been asked to identify the two least profitable factories so that they can be closed down, with the loss of all jobs. All of the company's factories are located in areas of high unemployment.
- D. An accountant has been asked to confirm that a complex financial instrument that has been recommended by the bank is suitable for the company. The accountant does not understand the instrument, but has confirmed its suitability because senior management wishes to use it.
- E. An accountant has been asked to compile a list of all contacts at the company's bank so that they can be included in the mailing list for the calendar and coffee mug that are distributed as business gifts by the company in December of every year.
Answer: A,B,D
NEW QUESTION 97
K plc is a large listed company in the retail industry. It has recently appointed T as a non-executive director. T has never had any previous involvement with K plc but is well known to K's Chief Executive P because T is the Managing Director of K plc's largest supplier.
K has recently expanded into Asia. Doubts about the wisdom of the move have been expressed in the financial press with some journalists commenting that it has exposed K plc to higher degrees of risk than previously.
The move had been approved by the Risk Committee which consists of four Non-Executive Directors (NEDs) all of whom have significant experience in business.
K plc does not have a Nominations Committee. Nominations to the Board are usually proposed by P and generally agreed by the other directors.
In relation to the above scenario which of the following comments is valid?
- A. K plc is in line with best practice as it only has NEDs on its Risk Committee.
- B. The absence of a Nominations Committee exposes K plc to the risk that the Chief Executive may have unfettered power.
- C. The Risk Committee should have rejected the proposal to enter the Asian market merely because it exposed K to greater risk than the other markets in which it operates.
- D. There is no possible conflict of interest in relation to T's position as a NED and as Managing Director of a supplier company since, in both roles, he would clearly want K plc to prosper.
Answer: B
NEW QUESTION 98
QAW is a quoted building company QAW has detailed rules relating to the wording of its contracts and the need to seek Board approval for any changes to the standard wording The Convener of the Audit Committee has just received a copy of an internal audit report relating to the QAW Land Reclamation subsidiary The subsidiary has signed several construction contracts over the past two years that have made significant changes to the standard wording, with no attempt to seek approval from QAW's Board The internal audit report quotes the manager in charge of QAW Land Reclamation as refusing to accept that there is a compliance error at the subsidiary The manager stated that the nature of the business done by QAW Land Reclamation would make it inappropriate to use the standard contract terms and that it would be impractical to seek permission for every one of the many changes that are necessary Which of the following would be an appropriate response to this item by QAW's Board?
- A. The Audit Committee should treat this as an internal matter that should be dealt with by the management team of QAW's Land Reclamation.
- B. The Audit Committee should seek an indication of the number of contracts with non-standard conditions are still in effect before deciding how to act.
- C. The Audit Committee should disregard the point because an explanation has been offered by the manager in charge of QAW Land Reclamation.
- D. QAW's Director of Legal Affairs should investigate the matter and. if necessary, develop suitable standard contracts for QAW Land Reclamation.
Answer: B
NEW QUESTION 99
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. The production department should not be granted funding for future projects unless there are compelling reasons to proceed.
- B. H should be held accountable for the overspend on the project.
- C. YGH should consider introducing more detailed checking of the assumptions underlying the costs of future projects.
- D. G should be held accountable for the overspend on the project.
Answer: C
NEW QUESTION 100
UIO sells mobile phones through a cham of 100 shops spread across the country Shop managers have considerable discretion over pncmg and the incentives offered to sales staff Shop managers are evaluated on the monthly contribution from completed sales. Those who exceed targets by more than 10% for three successive months are promoted Those who fail to achieve monthly targets in two successive months lose their jobs Which of the following statements are true of the performance management of UIO's shop managers?
Select ALL that apply.
- A. UIO's shop managers may have very little sense of loyalty to the company
- B. UIO's shop managers have an incentive to develop attractive sates promotions for their shops
- C. UIO's shop managers are encouraged to take risks that may harm UIO
- D. UIO's shop managers have an incentive to offer excellent customer service
- E. UIO's shop managers are encouraged to sell phones at a loss
Answer: A,C,E
NEW QUESTION 101
Division A of X plc produced the following results in the last financial year.
Net profit $200,000 Gross capital employed $1,000,000
For evaluation purposes all divisional assets are valued at original cost.
The division is considering a project that has a positive NPV, will increase annual net profit by $15,000, but will require average inventory levels to increase by $50,000 and non-current assets to increase by $50,000.
X plc imposes a 16% capital charge on its divisions. Given these circumstances, will the evaluation criteria of return on investment (ROI) and residual income (RI) motivate division A managers to accept the project?
- A. ROI Yes RI Yes
- B. ROI Yes RI No
- C. ROI No RI No
- D. ROI No RI Yes
Answer: C
NEW QUESTION 102
A company is keen to avoid becoming a victim to malware. Which TWO of the following techniques would be valid responses to this threat?
- A. Removing USB ports from all networked computers
- B. Paying ransomware demands immediately in order to ensure that malware is removed promptly
- C. Reverse engineering all viruses that are discovered on company machines
- D. Conducting denial of service attacks against perpetrators who attempt to infect the company
- E. Providing computers with independent internet access in the staff break room for personal emails and online shopping
Answer: A,E
NEW QUESTION 103
P Ltd, a service company, is seeking to recruit engineers to work in its maintenance division. Which TWO of the following suggestions will be most likely to help prevent fraud when recruiting the engineers?
- A. Checking that the engineers have a professional engineering qualification.
- B. Having a defined fraud policy statement that includes recruitment issues.
- C. Checking that the engineers do not belong to a union.
- D. Taking up references from previous employers.
- E. Checking that the engineers have previous experience in a similar business.
Answer: B,D
NEW QUESTION 104
Company X has been advised by its internal audit team that it should have a fraud response policy A is a new member in the internal audit team and he does not see why this would help to prevent fraud and has asked for an explanation Which TWO of the following would be included in this explanation? It would act as a deterrent and help prevent staff from committing fraud
- A. It would show that the company is taking the risk of fraud seriously.
- B. It would be part of the internal control system of the company
- C. It would clarify the role of various staff in detecting fraud
- D. It would lay down processes and procedures that internal audit should follow if they suspect fraud
Answer: B,D
NEW QUESTION 105
T is an accountant who has been accused of professional incompetence T agreed to advise a client on currency management and the client lost a great deal of money when a large foreign currency trade receivable declined in value without having been hedged.
Which of the following factors strengthens the case that T has been incompetent?
Select ALL that apply
- A. T had studied all relevant economic forecasts and had concluded that it would be too expensive to hedge this receivable
- B. T had offered the client two alternatives showing the costs and benefits of hedging the position, but did not strongly recommend either alternative
- C. T had never offered advice on foreign currency management before
- D. T had been too busy to stay up to date with continuing professional development requirements
- E. Since the loss the client's chief executive has spoken to her business contacts m the industry and all had hedged against a decline in this currency
Answer: C,D,E
NEW QUESTION 106
Physical access controls can greatly enhance the security of company assets.
Select THREE methods by which physical access security can be significantly enhanced.
- A. Use of access control pads with numerical keys on every door, which is otherwise locked.
- B. Use of USB sticks and removable media should be prohibited.
- C. Use of CCTV cameras monitoring all access points, with security guards monitoring images and a secured system making a recording.
- D. Use of one way mirrors, so people can be observed undetected.
- E. Personal individual ID card access, logging individual person movement through every door, which is otherwise locked.
- F. Visitors to be logged in by security staff and to be accompanied by a member of staff at all times until they leave.
Answer: C,E,F
NEW QUESTION 107
JNH is a major corporation that stores its customer database in the Cloud JNH has suffered a data breach that has led to customer credit card details being made available for sale on the internet JNH's Head of Security wishes to analyse network traffic at the cloud-based server in order to gain a better understanding of the manner in which the data was intercepted, but has been refused access.
Which of the following is the most likely explanation for the third-party owner's refusal to assist JNH's Head of Security?
- A. Admitting the breach would harm the reputation of the Cloud
- B. The Cloud is impregnable and so the breach must have been elsewhere
- C. The network data will not have been stored by the server's owner
- D. The server will contain data belonging to other clients
Answer: D
NEW QUESTION 108
A junior sales clerk at BCD, a wholesale jewellers, received an email which appeared to be from a well known parcel delivery company informing her that a delivery had been attempted outside office hours and had consequently failed She was asked to click on a link and complete some seemingly innocent but logical questions to effect the delivery on the next day She thought no more about it but was very surprised the next month to be awarded salesperson of the month as her sales had doubled Unfortunately, on investigation it was found that this was as a result of several fraudulent orders for high-value items that had seemingly been placed by an existing customer but delivered to a new address, which turned out to be a temporary box number The existing customer's credit card had been fraudulently charged for these orders Which of the following types of cyber-attack had the sales clerk been a victim of?
- A. Malvertising
- B. Ransomware
- C. Botnets
- D. Trojan
Answer: A
NEW QUESTION 109
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?
- A. 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.
- B. An Audit Committee consisting of five independent persons with expertise in finance, human resources, and medicine.
- C. 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.
- D. 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.
- E. Ensuring that the Head of Internal Audit examines and authorises all expense claims by hospital staff.
Answer: B,D
NEW QUESTION 110
G plc has decided to move its production plant to overseas Country A.
This would make the product cheaper to produce. The technology used to make the product is very advanced and some of the staff would have to move to Country A.
The Production Director has identified that there are some political risks in moving to Country A.
Match the methods of reducing the political risks associated with the move to Country A with the corresponding risks.
Answer:
Explanation:
NEW QUESTION 111
The technology used by 3D printers is developing rapidly These machines can now use a data file to print a solid object Depending on the printer the object can be plastic, metal or ceramic The increasing capability of those printers is being matched by the falling prices of the printers themselves and of the materials that they use to create the finished product Which THREE of the following suggest that 3D printing is a potentially disruptive technology?
- A. There is a limit to the size of objects that can be 3D printed.
- B. Some courier companies have purchased 3D printers for their depots
- C. Parts created by 3D printers can be distorted during the print process
- D. Many of the spare parts used to repair cars are made out of plastic or metal.
- E. Design engineers typically design and draw plans for new products on their computers.
- F. The printers use expensive materials
Answer: A,B,E
NEW QUESTION 112
B is a quoted construction company. Its Board consists of qualified and experienced engineers Which TWO of the following statements are correct?
- A. The quality of Board decisions may decrease.
- B. There is a greater risk of B's Board making strategic errors.
- C. B's Board cannot be blamed for recruiting like-minded individuals
- D. The greater consistency arising from the composition of B's Board will be beneficial
- E. Creating a nominations committee from B's Board will resolve any issues
Answer: D,E
NEW QUESTION 113
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 114
The internal audit department should always give a report at the end of its audit. This report is intended to be useful and help the company going forward. The report should always include any recommendations for improvements. Which of the following statements are true and which are false?
Answer:
Explanation:
NEW QUESTION 115
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