P3 Dumps To Pass CIMA Strategic Level Case Study Exam Exam in One Day (Updated 268 Questions)

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NEW QUESTION 131
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. YGH should consider introducing more detailed checking of the assumptions underlying the costs of future projects.
• B. H should be held accountable for the overspend on the project.
• C. The production department should not be granted funding for future projects unless there are compelling reasons to proceed.
• D. G should be held accountable for the overspend on the project.

Answer: A

 

NEW QUESTION 132
Which categories on a risk map best describe the loss of sales floor staff in a fast fashion chain?

• A. Low likelihood; high consequence
• B. High likelihood, low consequence
• C. Low likelihood; low consequence
• D. High likelihood; high consequence

Answer: B

 

NEW QUESTION 133
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?

• A. The system will make it easier for central management in the University to access the performance of individuals, departments and groups.
• B. There is a better chance that in-house experts will spot long-standing inefficiencies or anomalies in the existing system.
• C. The system may limit the freedom of heads of department to act with autonomy.
• D. Time will be saved because there will be no need to explain the basic structure and operations of the University to an outside contractor.
• E. In-house experts will be more easily able to integrate the module into the existing system.

Answer: A,D,E

 

NEW QUESTION 134
Select the most appropriate level of responsibility for managing each of the following risks.

Answer:

Explanation:

 

NEW QUESTION 135
Assuming a company has both internal auditors and risk managers, indicate which of these would perform the duties listed below:

Answer:

Explanation:

 

NEW QUESTION 136
BCD has recently experienced a cyber security breach which fortunately was carried out by someone more interested in demonstrating the weakness in its defence than by someone malicious This has made BCD realise that its cyber defence is inadequate BCD has engaged a cyber security consultant who has advised BCD to set up a Computer Incident Response Team (GIRT) What THREE of the following activities would this CIRT have responsibility for?
Recruit specialist security staff to avoid an incident

• A. Ensure all security policies are carried out to avoid an incident.
• B. Carry out or assist with any investigations of an incident
• C. Advise on best products against malware attacks to prevent an incident.
• D. Manage or assist with any communications throughout an incident
• E. Restore normal operations as soon as possible after an incident.

Answer: A,D,E

 

NEW QUESTION 137
An internal audit investigation involved conducting compliance tests on the processing of purchase invoices.
The purchase ledger clerk compares invoices against purchase orders and passes them for payment The invoices are then input into a computerised purchase ledger system The system checks that the supplier has a valid purchase ledger account, as authorised by the chief buyer, before crediting the supplier's account with the value of the invoice.
The internal auditor checked a sample of recorded purchase invoices against their corresponding purchase orders The internal auditor found four cases where invoices could not be agreed to corresponding purchase orders.
What is the potential significance of this compliance error?

• A. The purchase ledger clerk could have ordered goods for her own personal use.
• B. Payments could be made to non-existent suppliers
• C. The discrepancy is a minor one and should be ignored
• D. The purchase ledger clerk could make fraudulent payments to herself.

Answer: D

 

NEW QUESTION 138
HWG is a large company which grows and processes coffee The coffee is sold to supermarkets, branded with their names for sale as "own brand" products HWG brands and packages the coffee using the supermarkets' own designs HWG's directors are considering a strategic proposal to develop a range of coffees to be sold under a brand that HWG will develop Which TWO of the following should the directors consider as part of their strategic analysis?

• A. The design of packaging for the new brand
• B. The reaction of the supermarkets who currently buy coffee from HWG
• C. The choice of name for the new brand
• D. Recruiting a marketing firm to advertise the new coffee
• E. The sales volume forecast for the new coffee

Answer: B,E

 

NEW QUESTION 139
TYU is a retailer selling televisions. The company is financed wholly by equity.
Why might TYU be exposed to interest rate risk?

• A. TYU's cost of capital will vary with interest rates.
• B. TYU's competitors may have fixed rate borrowings.
• C. TYU's competitors may have variable rate borrowings.
• D. Customers' disposable income may change.
• E. TYU's suppliers may have borrowings.

Answer: C,D,E

 

NEW QUESTION 140
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. Providing computers with independent internet access in the staff break room for personal emails and online shopping
• B. Reverse engineering all viruses that are discovered on company machines
• C. Conducting denial of service attacks against perpetrators who attempt to infect the company
• D. Paying ransomware demands immediately in order to ensure that malware is removed promptly
• E. Removing USB ports from all networked computers

Answer: A,E

 

NEW QUESTION 141
Jo is a well known entrepreneur who founded JIS. a global producer or high technology equipment JIS has grown rapidly and was listed two years ago JIS's share price has grown steadily since its listing Jo serves as both CEO and Chair A recent newspaper article has suggested that JIS would benefit from having a separate CEO and Chair Which TWO of the following arguments are valid?

• A. Without a Chair to report to, Jo might pressurise the other directors into action that could damage JIS.
• B. There should be a division of responsibilities between the CEO running the Board and the Chair running the company's business
• C. Jo's setving as both Chair and CEO gives clarity of leadership and means JIS benefits from Jo's skills and knowledge of the company
• D. If Jo remains as Chair and a new CEO is appointed then Jo will remain responsible for implementing policies to execute the Board's strategy
• E. If Jo remains as CEO and a new Chair is appointed then Jo should still attend alt meetings between non-executive directors and the Chair.

Answer: A,B

 

NEW QUESTION 142
A government department is conducting a value for money audit on a school.
The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.

Answer:

Explanation:

 

NEW QUESTION 143
K is a large mining company. In its risk report it states that there is a risk of accidents and injury because of the nature of the industry. It states that it has staff training in place and complies with all Health and Safety regulations but in spite of this there will still be a residual risk that accidents and injuries may occur.
Which of the following statements are correct?

• A. Accepting a residual risk does not imply the company is reckless.
• B. Most companies in this industry will say something similar in their risk report.
• C. Some risks cannot be eliminated.
• D. The shareholders should not invest because there is still a residual risk.
• E. The directors are avoiding their responsibilities by saying there is a residual risk.

Answer: A,B,C

 

NEW QUESTION 144
Achieving the budget is often used as a good performance measure. However, there are problems with budgets which may mean they are not always good measures of performance.
Which TWO of the following statements about budgets suggest that they should not always be used to measure performance?

• A. Budgets are a commitment. They therefore act as a constraint on doing anything different.
• B. Budgets may deliberately be set too low by managers so they are easily achieved and make the manager look good.
• C. Budgets can give people goals to achieve and if everyone strives to achieve these goals the whole organisation will benefit.
• D. Budgets can be used to motivate staff if they are set correctly.

Answer: A,B

 

NEW QUESTION 145
E purchases parts for one of the machines it manufactures from Country X Place the risk classification next to the risk it relates to:

Answer:

Explanation:

 

NEW QUESTION 146
XYZ is a large supermarket chain which has engaged in online shopping and home delivenes It has a 24/7 service which runs on a central server allowing its customers to input orders at any time XYZ runs a card loyalty scheme which is hosted on the central server All transactions, whether shop based or on-line, create an update on the central database on the central server Which THREE of the following types of Personally Identifiable Information (Pll) will XYZ have to hold for its customers?

• A. Credit card details
• B. XYZ Customer identification
• C. Address
• D. Date of Birth
• E. Name

Answer: A,C,E

 

NEW QUESTION 147
YHJ is considering an investment in a project that will cost $20 million. Annual fixed costs will be $12 million per year, excluding depreciation. Annual sales are forecast at 5 million units, with a contribution per unit of
$8. After five years the equipment will be worn out and YHJ will have to spend $50 million on disposal costs.
The discount rate is 10%.
Calculate the sensitivity of the net present value of this project to a 20% increase in the disposal costs.

• A. 20%
• B. 31%
• C. 13%
• D. 11%

Answer: D

 

NEW QUESTION 148
A company has a sound system of internal controls that have been reviewed by the internal audit department.
Which TWO of the following correctly identify reasons why the company's control system might fail to prevent or detect an irregularity?

• A. Two fraudulent members of staff could collude.
• B. The internal audit department cannot be expected to identify control weaknesses.
• C. A director could override a control procedure.
• D. The accounting system could combine manual and computerised controls.
• E. A dishonest member of staff could input an invalid transaction

Answer: A,C

 

NEW QUESTION 149
H sells machinery and also associated services, such as advice and repairs. H's industry is going through considerable transformation.
Classify each of the examples of information available to H's management as strategic, operational or of having little value.

Answer:

Explanation:

 

NEW QUESTION 150
C is a large international supermarket chain. It has many thousands of suppliers and many thousands of potential suppliers competing for shelf space m its supermarkets.
Which of the following provisions would be appropriate for C to include m its ethical code in relation to its suppliers?
Select ALL that apply

• A. Cshall continuously remind suppliers that it always has several alternative suppliers to choose from.
• B. C shall insist on an exclusivity agreement with each supplier so that identical products are not available from other outlets
• C. C shall not use its buying power unscrupulously.
• D. C shall endeavour to take as high a percentage of each supplier's output as possible
• E. C shall endeavour to adhere to the terms of its contracts with its suppliers at all times
• F. C shall keep confidential all information received from suppliers and potential suppliers

Answer: C,E,F

 

NEW QUESTION 151
COM is a well established company in the construction industry The company was founded by the Mac family
30 years ago and several family members still serve on the Board The company obtained a listing five years ago The Board has an appropriate balance between executive and non-executive members It also has audit remuneration and nomination committees The average age of board members is 68 COM is profitable but profit margins have been falling steadily and this year's revenues are lower than it was achieved last year The Board recognis thai it does not have a long term strategy in place and has been losing business to newer, more aggressive competitors Which THREE of the following statements are correct?

• A. The non-executive directors should have challenged the lack of long term strategic planning
• B. The nomination committee should have had a succession plan in place for directors.
• C. The remuneration committee should consider incentives such as share options to encourage the Board to focus on COM's long term strategy
• D. The nomination committee should be operating for the benefit of the directors.
• E. The audit committee should have alerted the Board to the impact of falling profit margins

Answer: A,B,C

 

NEW QUESTION 152
A US company enters into a five year borrowing with bank A at a floating rate of USD Libor plus 2%.
It simultaneously enters into an interest rate swap with bank B at 3.5% fixed against USD Libor plus 1%.
What is the hedged borrowing rate, taking the borrowing and swap into account?
Give your answer to 1 decimal place

Answer:

Explanation:
4.5%

 

NEW QUESTION 153
T has its computer facilities in a building adjacent to its headquarters Severe structural problems have been discovered with this building and T has been advised that the only option is demolition and rebuild This leaves T with strategic decisions to make about its IT provision and it has decided to investigate the outsourcing of its services.
Which TWO of the following factors should T consider as most important at this stage?

• A. A supplier who can act as its agent in choosing the cheapest options
• B. A supplier who provides a wide range of services
• C. A supplier with a long history of providing outsourcing services
• D. A supplier who can act as a partner in considering all its business needs
• E. A supplier who has facilities conveniently located close to its headquarters

Answer: C,E

 

NEW QUESTION 154
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. $88,000 gain
• B. $16,000 loss
• C. $62,000 gain
• D. $95,000 gain

Answer: C

 

NEW QUESTION 155
The government health service in country H employs well over 100,000 staff in various locations throughout the country. Traditionally, local management has had high levels of autonomy in relation to personnel issues and there are several different human resources (HR) managers located across various regions.
The government has decided to introduce a completely new HR/payroll information system to have just one database containing all relevant information about every staff member on the payroll (start date, job title, salary and all other details) and to use this information to begin streamlining recruitment and HR policies.
The government has outsourced the system's development to a reputable company.
Which of the following are disadvantages associated with this IT project?

• A. Any initial problems in running the system could have serious repercussions as it could lead to, for example, staff not being paid, payroll tax not being properly collected, and similar difficulties.
• B. The amount of data storage space required to run the system may not be available.
• C. There is a risk that the system will not capture all of the existing terms and conditions of staff, thus leading to industrial relations problems later.
• D. The system could make it more difficult to employ specialist medical staff on terms and conditions which are different from the normal terms and conditions available.
• E. The government is very heavily dependent on the contractor to whom this assignment is outsourced and if they do not to perform as required this could have serious consequences.
• F. There is a risk that significant anomalies in the current system will be highlighted.

Answer: A,C,E

 

NEW QUESTION 156
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