[2022] Use Valid New Free P3 Exam Dumps & Answers [Q80-Q99]

QUESTION 80
MNB is a multinational IT company with headquarters in Asia and with operations in all continents.
MNB is attempting to expand its operations in Europe. This is seen as a major challenge as the European market is very well developed and highly competitive.
MNB develops and manufactures its own products. Parts and assemblies are sourced across Asia, America and Europe. These are sometimes purchased locally as a condition of a contract, but MNB aims to include as much of its own equipment as possible. Transfer prices between MNB’s subsidiaries can be set in YEN, USD, EURO, GBP. Transfer prices are revised every month in line with production times as most goods are made on short order with sales cycles running at 3-4 months.
What types of risk are being presented here?

QUESTION 81
VBN 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.

QUESTION 82
Which TWO of the following scenarios should be considered in strategic scenario planning by a publishing company that specialises in academic textbooks?

QUESTION 83
M is a listed company. It is hoping to invest in a risky new venture. M has a substantial amount of cash to invest in the venture. M would have found it difficult to raise new finance as it has a high level of gearing.
Which of the following statements about stakeholders’ conflicting interests are true?

QUESTION 84
Which of the following actions would breach CIMA’s Code of Ethics for Professional Accountants?

QUESTION 85
The board of OKN is considering an investment opportunity that will require the company to borrow a large amount in month 10 of the current financial year and to invest it immediately in property, plant and equipment.
This investment has a positive net present value that justifies the risk, but the directors are reluctant to invest in the project.
Why might the directors be reluctant?

QUESTION 86
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.

QUESTION 87
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.

QUESTION 88
Which of the following are threats to the control environment?

QUESTION 89
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?

QUESTION 90
Laura is an accounts clerk. She is supposed to sign each invoice as evidence that she has conducted checks against supporting documents. Sometimes Laura signs invoices without making these checks.
Terry is a member of the internal audit team. Terry has been told to conduct compliance tests on whether Laura is checking the invoices properly.
Which of the following would give Terry a false sense of assurance that Laura’s checks have been operating?

QUESTION 91
James owns a small company which sometimes suffers from credit risk.
Which of the following measures should he put in place to help reduce this risk?

QUESTION 92
P Ltd, a manufacturing company, is considering a new capital investment project to set up a new production line. The initial appraisal shows a healthy net present value of $6,465 million at a discount rate of 10% as shown in the table below:
However, management is unsure about the demand for the product which will be produced and has insisted that the future revenues should be reduced to certainity equivalents by taking 70%, 65% and 60% of the years
1,2, and 3 cash inflows respectively.
What should P do?

QUESTION 93
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?

QUESTION 94
TLY sell building materials such as bricks sacks of concrete and paving slabs to builders Materials are kept in a large yard Customer orders are fulfilled by a team of 30 employees who use forklift trucks to move sold items to the loading bay, from where they are loaded onto lornes for dispatch to the customer The sales office prepares dispatch notes, which are used by the yard employees to identify the items that have been ordered Which TWO of the following controls would be cost-effective ways to prevent the theft of inventory by TLY’s staff?

QUESTION 95
L is a specialist deep sea diving company The company specialises in challenging tasks that are often rejected by other companies as being too risky Most assignments are difficult and some are very dangerous L has very experienced divers who are highly trained and are safety conscious In spite of the dangerous work, L has an excellent success rate and is highly sought after L charges very high fees for its work Despite L’s precautions, the likelihood of accidents is high and the consequences are also high L has an excellent insurance which has always been very expensive but the price has just been increased by 40% Which of the following is correct?

QUESTION 96
The long-term prospects for interest rates in the UK and the USA are 2% and 6% per annum respectively.
The GBP/USD spot rate is currently GBP/USD1.71.
Using interest rate parity theory, what GBP/USD spot rate would you expect to see in six months’ time?

QUESTION 97
A large department store has just discovered that the staff in the store coffee shop have been defrauding the company for the past three years. The six employees who work in the coffee shop have been keeping a proportion of the cash takings, concealing the theft by not recording all sales up in the till They shared the proceeds of this fraud between them The fraud was only uncovered when one of the employees left and his replacement reported the theft to management rather than becoming involved in the crime Which of the following best describes the role of the store’s internal controls in the context of this fraud?

QUESTION 98
R is a manufacturer of biscuits. The market for biscuits is extremely competitive with many companies competing for contracts with large supermarkets. The intensity of the competition means that prices are kept low; and the buyers can demand higher levels of quality, and greater flexibility in supply arrangements.
Which of the following represent ways that the use of an Information System could help R to win and retain supermarket contracts in such a competitive market?

QUESTION 99
The Committee of Sponsoring Organisations (COSO) outlined six key principles of Enterprise Risk Management (ERM).
Which of the following are COSO key principles?