Free CIMA CIMAPRA19-P03-1-ENG Exam Questions

Become CIMA Certified with updated CIMAPRA19-P03-1-ENG exam questions and correct answers

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Total 276 Questions | Updated On: Jan 28, 2026

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Question 1

SDF is a quoted company. Which of the following matters should normally be dealt with by SDF's audit committee?

A : external auditor has requested a higher fee than normal for the forthcoming financial year because new legislation will require additional audit work.

B : Head of Internal Audit is concerned that a recent internal audit investigation may have revealed serious compliance failures.

C : external auditor is concerned that an accounting policy selected by the Finance Director does not comply with the spirit of the relevant accounting standard.

D : external auditor has identified a material error, due to a clear miscalculation, in the draft financial statements.

E : Finance Director will be retiring within the next year and a replacement will have to be found.

Answer: A,B,C

Question 2

A capital investment project shows a NPV of 3,450 at a discounted rate of 8% and an NPV of 1,210 at a discounted rate of 9%.
Whatistheinternal rate ofreturn?

A : 11.85%

B : 10.85%

C : 10.54%

D : 9.54%

Answer: D

Question 3

M, a manufacturing company, has had some problems with defects in one of the main productsitproduces. This product has been made by the company for many years and is very profitable. Last monthithad 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 : could increase the number of quality control staff.

B : could introduce a procedure where quality control staff sign a form at the end of each dayto say they have examined 1 in 10 products for defects and they are satisfied with the quality.

C : production director could examine one in every 10 products and sign a form to say they are satisfactory.

D : could service machinery at least once a month as recommended by the machinery supplier.

E : could check all employees qualifications to ensure they are qualified for their jobs.

Answer: A,B,D

Question 4

Company W produces mobile phone components and has recently tendered for a substantial contract. The results of the tendering process will not become available until three months from now. If the company is successful it will require 2,000 units of a commodity which is currently traded in an open commodity market for $740 per unit. However, there has been speculation that this commodity could increase substantially in price over the next three months and so the company is considering purchasing the commodity now and storing it for three months.
The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of the three month storage period.
Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue to Company W assuming that the price of the commodity rises to $800 in three months' time?

A : $62,000 gain

B : $95,000 gain

C : $88,000 gain

D : $16,000 loss

Answer: A

Question 5

Company M has lost 25% of its revenue in the last three months due to bad debts. One of thereceivables written offwasfroma long standing customer and the other three werefromnew customers. The management accountant has warned the sales team that the company cannot survive any more substantial bad debts.
Which of the following internal controls should be put in place to try and prevent further bad debts?

A : credit check should be carried out on each new customer.

B : edit limits should be set for all customers. However, if the credit limit will cost a sale then sales staff can override this limit.

C : o sales staff must authorise new customers and sign a form stating that they have done so.

D : aged analysis of customer balances must be reviewed every month.

E : soon as a customer payment is overdue they should not be allowed to purchase more until their balance has been reduced

Answer: A,D

Page: 1 / 56

Total 276 Questions | Updated On: Jan 28, 2026

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