CIMA P3 - Risk Management

A junior sales clerk at BCD, a wholesale jewellers, received an email which appeared to be from a well known parcel delivery company informing her that a delivery had been attempted outside office hours and had consequently failed She was asked to click on a link and complete some seemingly innocent but logical questions to effect the delivery on the next day She thought no more about it but was very surprised the next month to be awarded salesperson of the month as her sales had doubled

Unfortunately, on investigation it was found that this was as a result of several fraudulent orders for high-value items that had seemingly been placed by an existing customer but delivered to a new address, which turned out to be a temporary box number The existing customer's credit card had been fraudulently charged for these orders

Which of the following types of cyber-attack had the sales clerk been a victim of?

Multinational companies have a variety of methods by which to manage currency risk.

Select ALL internal hedging methods from the following list.

WTW is a global company which produces high-tech equipment such as smart televisions and mobile phones The CFO has just resigned, having been offered a post at a competitor The CFO was well regarded and WTWs share price has fallen in response to the announcement

At a board meeting the production director commented that the share price fall is the fault of the nomination committee

Which THREE of the following statements are correct?

Which of the following are objectives of the audit planning procedure?

GHJ is a manufacturing company that insures against the financial costs associated with industrial injuries involving staff. The Health and Safety Office is part of GHJ's Operations Department. GHJ's insurers will automatically increase the insurance premium by 10% in the event of a claim against the policy.

Which TWO of the following are correct?

An oil company has entered into a joint venture with a competing oil company to develop a new oil field. The joint venture arrangement is intended to mitigate the risks associated with developing the oil field.

The following disclosure appears in the oil company's risk report:

"Many of our large projects and operations are conducted through joint ventures. These arrangements involve complex risk allocation and indemnification arrangements and we have less control over these activities than we would have if we had full ownership and control. Our partners may have economic or business interests that are opposed to ours, and may exercise the right to block key decisions or actions. We believe the joint arrangement is in our best interest."

Which of the following statements are correct?

B is a family run security company with a number of prestigious clients who rely on it to maintain online access to their CCTV and alarm systems and respond to any detected intrusions or malfunctions.

It designs and installs security systems for a number of UHNW (Ultra High Net Worth) individuals who may have several seasonal and city residences largely unoccupied for many months of the year.

B's reputation as 100% secure is crucial to its on-going success in this very specialised marketplace.

Select THREE factors which should be given prominence in B's fraud risk management strategy.

A project has been evaluated on the basis that it will cost $22 million and will have a net present value of $4.3 million The project has commenced and $5 million of the $22 million has been invested. A problem has been discovered that will cost an additional $4.5 million to rectify. The $4.5 million will be payable immediately. What is the NPV of continuing with this project?

NLC, a retail chain, is considering moving its information systems which support its point of sale infrastructure into the cloud.

Which TWO factors should it consider in choosing its supplier?

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.