Free CIMA CIMAPRA19-P03-1-ENG Exam Questions

Question 1

GHY is a listed company. Tom isGHY'sCEO and Peter isitsnon-executive Chair of the Board. Tom and Peterbothhave substantial relevant business and industrial experience andboth are believed to have considerable integrity. Tom and Peter quickly developed a good working relationship after Peter's appointment. They have become close friends.
Tom briefs Peter on every aspect of the business. Tom and Peter jointlyagreethe agenda foreveryboard meetingandboth agree on the manner in which matterswill be presented to theboard.
Taking account of the principles of goodcorporategovernance, which of the following statements is correct?

A : is entirely appropriate that Tom and Peter have this kind of relationship and both are acting in the best interests of the company

B : n-contentious board meetings show how well Tom and Peter are running the company and shows that the management is cohesive.

C : relationship between Peter and Tom may have a detrimental effect on company decision making as the Boardis not always being informed about matters in an unbiased manner.

D : nce the non-executive chair clearly has a significant role within this company there is little danger that any individual will become excessively dominant.

Answer: C

Question 2

TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.
TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF's cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:
TRF purchased the Big machine, but annual requirements only exceeded 600,000once, in year 3, when 720,000 units of emissions were emitted.
Calculate the amount that the post completion audit showsTRF overpaid for the ownership costs associated with this machine.
Give your answer to the nearest whole $ (in $'000s).

A :

Answer: A

Question 3

With regard to the rote of the audit committee which of the following statements are correct? Select ALL that apply

A : audit committee should design the system of internal controls

B : audit committee should decide annually whether it needs an internal audit function

C : audit committee should decide annually whether it needs an external audit function

D : audit committee should review and monitor the effectiveness of the company's internal audit function

E : audit committee should provide arrangements for whistle blowing

F : The audit committee should engage consultants to carry out business reviews

Answer: A,D

Question 4

DFR is an online retailer that sells picture frames The software running on DFR's website enables customers to log in and make purchases by inputting an email address as a user name and a password that must contain at least eight characters, including upper and lower case letters, numbers and punctuation marks (e.g. , $ or!) Once logged in, customers can check previous orders that they have placed.
Customers can also use DFR's website to change personal details, including credit card numbers and delivery addresses Whenever they wish to use those facilities, the software sends a text message containing a six-digit number to their mobile phones They must input that number before the system will accept changes to their personal details
Which TWO of the following statements are correct?

A : It is illogical to have different security measures in place for orders and for access to personal details.

B : software treats customers' personal details as being more sensitive than their ordering histories

C : arrangement with the text message will have no effect on the security associated with changing personal details

D : tomers should be able to update the mobile phone numbers in their DFR accounts using only their email addresses and passwords for access

E : software should never show the whole of a customer's credit card number on screen, even if the customer has logged in and input the six-digit number.

Answer: A,C

Question 5

You are theManagementAccountant for a company which supplies baked food to a string of retail outlets; biscuits, cakes, savoury snacks etc.
You discover that a trainee employee, who is responsible for cleaning out the delivery vans has been taking damaged goods and packets which have reached their sales expiry date and has been selling them to friends. These products would otherwise have been discarded as waste.
The trainee in question is the nephew of one of the senior managers.
What is the correct course of action?

A : ve a quiet word with the trainee and ask him to stop.

B : ve a quiet word with the senior manager, the trainee's relative and askthem to deal with it.

C : cument the facts and escalate to the trainee's manager.

D : nothing, the product was designated as waste anyway.

Answer: C