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CIMA P3 - Risk Management

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Page: 9 / 11
Total 339 questions

The shares of a company have a beta factor of 1.15. Therefore, which of the following must be true?

A.

The shares have more unsystematic risk than the stock market average.

B.

The shares have more systematic risk than the stock market average.

C.

The shares have more total risk than the stock market average.

D.

The shares have less unsystematic risk than the stock market average.

B uses a balanced scorecard to monitor the performance of its divisions.

Classify each of the following decisions taken by a division's management team as either commercially sound or dysfunctional.

D plc is a public relations company. Shares in D plc have recently been listed on the UK stock exchange.

D plc has an internal audit department that reports to the Chief Executive Officer (CEO). The CEO is considering outsourcing internal audit to an audit firm, which would not be the firm that conducts D plc's external audit.

Identify THREE advantages to D plc of outsourcing internal audit in this way.

A.

Doing so may improve independence.

B.

Decisions relating to internal audit can be based solely on cost.

C.

Internal audit will have a better understanding of D plc's objectives and culture.

D.

Specialist skills may be more readily available.

E.

Risk of staff turnover is passed to the outsource company.

Move the category of risk to the box beside the risk description it best matches.

MNO is a hotel chain which consists of many small local hotels spread throughout Sealand and often used by business customers It has decided to undertake scenario planning to see how it might be affected by changes in the future.

Which TWO of the following scenarios would be helpful in strategic scenario planning for MNO?

A.

The increase in the use of search apps to book hotel rooms

B.

An increase in interest rates

C.

Climate change

D.

The growth in internet services that facilitate short-term room lets by private landlords.

E.

A change in local business rates for private property.

Select the correct ethical principle that corresponds to each ethical dilemma described.

Company C wishes to recruit an employee who will have responsibility for, among other things, the receipt and handling of cash.  Which THREE of the following would be most likely to provide useful information about the candidate from the point of view of the Internal Auditor?

A.

The candidate's academic qualifications.

B.

References from previous employers of the candidate.

C.

The candidate's personal referees.

D.

The candidate's membership of a professional body.

E.

Confirmation that the candidate does not have a criminal record.

Which of the following is NOT a financial risk.

A.

Selling goods on credit terms.

B.

Taking out variable rate loans to finance short term investments.

C.

Sourcing raw materials overseas to manufacture goods.

D.

Global warming.

JC is a car manufacturing company in country C and manufactures diesel cars It is facing a number of serious risks Which TWO of the following risk factors are external?

A.

JC's marketing director is considering an attractive job offer from one of J's main competitors

B.

Country F, JC's main market, is threatening to impose tariffs on car imports

C.

JC is facing court action arising from injuries to customers caused by an alleged brake failure in one of its cars

D.

Diesel cars are being criticised by experts because it is believed they cause more harmful pollution than petrol

E.

JC's production staff are complaining that their wages are too low compared to wages paid to other employees.

Physical access controls can greatly enhance the security of company assets.

Select THREE methods by which physical access security can be significantly enhanced.

A.

Use of CCTV cameras monitoring all access points, with security guards monitoring images and a secured system making a recording.

B.

Use of one way mirrors, so people can be observed undetected.

C.

Use of USB sticks and removable media should be prohibited.

D.

Use of access control pads with numerical keys on every door, which is otherwise locked.

E.

Personal individual ID card access, logging individual person movement through every door, which is otherwise locked.

F.

Visitors to be logged in by security staff and to be accompanied by a member of staff at all times until they leave.