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Free CIMA P3 Practice Exam with Questions & Answers | Set: 5

Questions 41

You are a consultant to an international charity which provides aid to people displaced by war, civil unrest, and natural disaster. The charity has requested you to carry out a post implementation review on their new procurement and logistics system. Which TWO of the following should you be most concerned about when conducting this review?

Options:
A.

An assessment of how the aid is used once it has arrived at its destination.

B.

The identification of the reason for any cost overruns so as to be able to assign responsibility to particular individuals so that the management can deal with them as they see fit.

C.

An assessment of the extent to which the new system has led to more efficient delivery of aid to those in need.

D.

To create a record of good and bad experiences in relation to the implementation of the project so that the charity is able to learn from them should they decide to implement a similar project in the future.

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Questions 42

VBN's home currency is the V$. On 1 January, VBN must make a payment of C$2 million on 31 March of that same year.

On 1 January the spot exchange rate was V$1 = C$0.4.

On 1 January VBN paid $180,000 for a call option to buy C$2 million for V$5.5 million on 31 March. VBN's cost of borrowing was 8% per year.

On 31 March the spot rate was V$1 = C$0.45.

What was the total cost, including the cost of the option, of settling the payable?

Options:
A.

V$4.628 million

B.

V$5.684 million

C.

V$4.444 million

D.

V$5.5 million

Questions 43

Which of the following statements concerning the role of the Audit Committee is correct?

Options:
A.

The Audit Committee should provide arrangements for whistle blowing.

B.

The Audit Committee should design the system of internal controls.

C.

The Audit Committee should engage consultants to carry out business reviews.

D.

The Audit Committee should review and monitor the effectiveness of the company's internal audit function.

E.

The Audit Committee should decide annually whether it needs an internal audit function.

F.

The Audit Committee should decide annually whether it needs an external audit function.

Questions 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.

P3 Question 44

Options:
Questions 45

You have been assigned the role of lead internal auditor. Your task is to carry out the annual assessment of the production line maintenance department.

When planning for this audit, which of the following must be completed?

Options:
A.

Prepare the report.

B.

Establish whether the controls are adequate or not.

C.

Decide how the controls will be tested.

D.

Learn all about the systems and controls in the department.

E.

Carefully consider any control weaknesses that are reported.

F.

Review previous audit findings for the department.

Questions 46

A firewall in a computer suite is designed to

Options:
A.

prevent the overloading of the network by unauthorised traffic

B.

prevent a disaster from occurring by limiting the spread of any fire

C.

prevent viruses from infecting the network

D.

prevent unauthorised traffic into defined areas of the network

Questions 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?

Options:
A.

The Treasury Department should not be encouraged to speculate.

B.

The Treasurer should not have a great deal of responsibility.

C.

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

D.

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

Questions 48

Which of the following risks should be given highest priority?

Options:
A.

Risks which have a high impact and which may arise occasionally

B.

Risks which have a low impact but which arise frequently

C.

Risks which have a high impact and have a low likelihood of arising

D.

Risks which have a low impact and a low likelihood of arising

Questions 49

A UK manufacturing company has simultaneously:

   • purchased a put option to sell USD 1million at an exercise price of GBP1.00 = USD1.65

   • sold a call option that grants the option holder the right to buy USD 1million at a price of GBP1.00 = USD1.61 (this option has the same maturity date as the put).

Which of the following is a valid explanation for entering into these option positions?

Options:
A.

The company expects to receive USD 1million from a customer and wishes to offset the cost of the put option by the premium on the call option.

B.

The company expects to pay USD 1million to a supplier and wishes to offset the premium from the call option against the cost of the put option.

C.

The company expects to receive USD 1million from a customer and wishes to obtain an additional benefit if the USD strengthens beyond GBP 1.00 = USD 1.61.

D.

The company expects to pay USD 1million to a supplier and wishes to obtain additional protection against the USD strengthening beyond GBP 1.00 = USD 1.65.

Questions 50

You have just been employed as a management accountant in a small business with an annual turnover of $0.5 million.

You have a wide range of duties because the business is small.

Which of the following is an ethical risk?

Options:
A.

Being asked to buy very small gifts for key clients.

B.

Being asked to work weekends, playing golf with clients.

C.

Being asked to work weekends, taking clients to night clubs making sure they have as much alcoholic drink as they want so that they will sign contracts.

D.

Being asked to work weekends working out tenders for new contracts.

Exam Code: P3
Certification Provider: CIMA
Exam Name: Risk Management
Last Update: Jul 17, 2025
Questions: 339

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