Check the Free demo of our P3 Exam Dumps with 287 Questions [Q41-Q56]

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Check the Free demo of our P3 Exam Dumps with 287 Questions

Clear your concepts with P3 Questions Before Attempting Real exam

CIMA P3 (Risk Management) certification exam is one of the most prestigious and recognized certifications in the field of finance and accounting. Risk Management certification is designed to impart knowledge and skills in risk management, strategic management, and project management. CIMA P3 exam is widely recognized by employers worldwide and is recommended for professionals who are looking to enhance their career prospects in the finance and accounting industry.

The importance of risk management cannot be overstated in today’s business environment. Organizations face a wide range of risks, from financial and operational risks to strategic and reputational risks. Effective risk management is essential for businesses to succeed, and the CIMA P3 exam is designed to ensure that candidates have the skills and knowledge necessary to manage risks effectively. By passing P3 exam, candidates demonstrate their ability to contribute to the success of their organization by identifying and mitigating risks that could impact its performance.

NO.41 Identify, from the list provided, which category of business risk most accurately describes the events detailed below.

NO.42 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.

NO.43 HBN is a service company that offers cloud-based data storage and management on behalf of clients HBN pays an independent accountancy firm to review its cybersecurity arrangements, conduct penetration tests and report to HBN’s Board on the results Which TWO of the following are correct?

Potential clients for HBN’s services will expect to receive copies of these independent reports immediately after they are submitted.

The independent accountancy firm will disclose all of the shortcomings that it identifies in its report, even if they embarrass HBN

HBN could save time and reduce cost by having its own internal audit department conduct these investigations and report accordingly.

It would prove simpler for HBN to permit clients to conduct their own cybersecurity reviews that would take account of the sensitivity of their data

The independent accountancy firm will guarantee that there are no control weaknesses in HBN’s systems, provided its results prove satisfactory

NO.44 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.

NO.45 Which TWO of the following are benefits of carrying out a post-completion audit of capital projects?

A post-completion audit can help find out who was to blame for a project exceeding the budget.

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.

A post-completion audit can help find out where a project went wrong so it can be fixed immediately.

A post-completion audit can investigate variances from the budget on completed projects.

NO.46 Which THREE of the following are true with regard to managing the changeover from an old to a new computer system?

Pilot changeover moves the simplest part of the business to the new system first

Parallel running involves keeping the old system running normally until certain data retention criteria are met or confidence is gained, while the new system deals with the new workload Data input is usually earned out on both systems

All methods of changeover carry high risk and it is the preparation consideration of data compatibility and data cleansing before the changeover which has the biggest impact on the smoothness of the transition

Phased changeover moves individual portions of the business to the new system one at a time

Direct changeover, or big bang, is only used when the systems are significantly different such that comparing the outputs of the two systems is largely irrelevant

Phased changeover is the safest and slowest method of changeover

NO.47 Which of the following statements best explains why a corporate treasury department should be established as a cost centre rather than a profit centre?

The Treasury Department should not be encouraged to speculate.

The Treasurer should not have a great deal of responsibility.

There is no way for the Treasury Department to generate revenue.

The Treasurer has the ability to manipulate the Department’s reported profit.

NO.48 You are the Management Accountant for P, a food manufacturing company with an annual sales revenue of $5 million.
You discover that the Production Manager’s records are inconsistent. Raw materials purchased do not agree to the total recorded for transfers to production plus wastage. There is an average shortfall of 2% of purchases.
You investigated and discovered that there are often mistakes made during manufacturing that results in food that is safe to eat, but cannot be sold because of visual flaws. The Production Manager is supposed to scrap all such damaged product and write all such losses off as waste, but you discovered that he has been giving the damaged food to a charity that assists homeless people. No records are made of such gifts in order to conceal the losses due to manufacturing errors.
What should you do?

Do nothing, this is a good cause and the amount is insignificant.

Instigate disciplinary action, this is both theft and poor management.

Instigate a confidential, but documented, review with the Production Manager and tell him to stop.

Instigate a review of the production process to potentially reduce the amount of wastage.

Instigate a process whereby edible but unsellable items can be given to the charity officially.

NO.49 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?

18%

17.77%

18.23%

16.50%

NO.50 B is a horticultural retailer with limited funds available to acquire new retail property.
B’s Finance Manager has analysed two potential property investments. Investing in property P shows an IRR of 21% while the IRR on property Q is 17%.
The Finance Manager has also advised that the NPV for property P is $750K, while the NPV of property Q is
$850K.
The Board needs to choose between the two properties as it has insufficient funds for both. Based purely on the Finance Manager’s analysis, which of the following is true?

Premises P is clearly better than property Q in all respects.

Premises Q is clearly better than property P in all respects.

Board members who wish to maximise return on capital employed will want property P while those who wish to maximise shareholder wealth will want property Q.

Board members who wish to maximise return on capital employed will want property Q while those who wish to maximise shareholder wealth will want property P.

NO.51 V buys vegetables and fruit from three farms located in a different part of V’s country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory’s owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.

NO.52 V buys vegetables and fruit from three farms located in a different part of V’s country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory’s owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.

NO.53 V buys vegetables and fruit from three farms located in a different part of V’s country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory’s owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.

NO.54 University B has several departments. Each department at times obtains funding from different sources such as government grants and industry sponsorships. The central management of the university has decided to develop a module within its current Information System to track these funds centrally.
The central management of the University has decided to utilise in-house expertise in order to build this module.
Which THREE of the following represent advantages of developing this module and doing so using in-house expertise?

Time will be saved because there will be no need to explain the basic structure and operations of the University to an outside contractor.

In-house experts will be more easily able to integrate the module into the existing system.

There is a better chance that in-house experts will spot long-standing inefficiencies or anomalies in the existing system.

The system may limit the freedom of heads of department to act with autonomy.

The system will make it easier for central management in the University to access the performance of individuals, departments and groups.

NO.55 Kate is a management accountant. Her immediate superior plans to apply for a promotion and his strongest competitor is the sales manager. Kate’s superior has ordered her to set unattainable sales targets in a sales budget in order to reduce the sales manager’s promotion prospects. He told her not to tell anybody.
Kate asked the finance director for advice. He told her that he wanted her immediate superior to get the promotion and so she should set the unattainable budget as instructed.
Kate set the budget as instructed.
Which THREE fundamental ethical principles has Kate breached?

Integrity

Objectivity

Professional competence and due care

Confidentiality

Professional behaviour

NO.56 Select the correct ethical principle that corresponds to each ethical dilemma described.