Latest CIMA CIMAPRO19-P03-1 Exam dumps 2026

Question No: 1

MultipleChoice

The management of U isreviewing internal controls throughout the company. Ithasnoted the following:-

1. In the trade receivables section, journal adjustments are made by the clerks, without any reference to their supervisor. Journal adjustments may relate to sales returns, discounts allowed, or transfers between accounts.

2. In the purchasing department, the purchasing manager selects and approves all suppliers, astheyarethe only person with sufficient experience to do so. They usea very limited number of suppliers becausethey can rely on these suppliers to provide goods of the quality required at a competitive price. They donot keep any documents in relation to negotiations with other potential suppliers or other quotes obtained.

In relation to the above, Which option best statements are valid?

Options

AThe fact that the purchasing manager uses a very small number of suppliers is, in itself, a sign of poor internal controls.

BIt is acceptable for clerks in the trade receivables section to make journal adjustments without authorisation provided the amounts involved are not material to U's financial statements.

CIt is acceptable for clerks in the trade receivable section to make journal adjustments without authorisation, provided they have no access to cash receipts.

DThe fact that the purchasing manager does not keep documentation relating to negotiations with suppliers, or potential suppliers,is evidence that they are involved in fraudulent activity.

EClerks making journal adjustments without reference to their supervisor is evidence of inadequate separation of duties.

FThe way the role of purchasing manager is carried out in U increases the chance that the company will fall victim to fraudulent activity.

Question No: 2

MultipleChoice

C Ltd is a private, family-owned company which is hoping to become listed on a recognised Stock Exchange within the next two years. At the moment, the Board of Directors comprises five directors; four of whom are from the founding family and all of whom are involved in the day-to-day running of the business. The remaining director obtained a seat on the Board threeyearsagoas a condition of an investment by a venture capital fund.

The Board meets in half-day sessionsonce a fortnight and the Board meetings are reasonably well run. All decisions are taken by the Board as a whole. There are no sub-committees.

Which of the following steps would it be appropriate for C Ltd to take in the light of the proposed listing?

Options

AAppoint enough independent non-executive directors (NEDs)that they make up at least 50% of the Board.

BAppoint one of the NEDs as Chair of the Board.

CInsist that the venture capital company director be removed as he is not necessarily motivated to act in the best interests of C Ltd.

DSet up at least three sub-committees namely remuneration, nomination, and audit committees.

EEnsure that the current executive directors are given 10 year contracts starting on the day the company is floated, to ensure consistency and continuity in the management of the company.

FSet up an 'agenda setting' sub-committee consisting of the current executive directors to decide the agenda for each Board meeting.

Question No: 3

MultipleChoice

SC is a professionalfootball club which is currently listed on a recognised stock exchange. There is a proposal that it builds a new stadium at a location a considerable distance from its current stadium.

There is strong support within the club for the move as the current ground is now over 40 years old and has not been extensively modernised in that time.

However, there is a lot of opposition to the move in the area where it is proposed to locate the new stadium.Objectors claim that the new stadium will increase traffic and pollution in the area and will adversely affect the value of their properties.

Which option best statements about the responsibility of theboard of SC is correct?

Options

ASC is now a listed company and so the board shouldprioritise the interests of shareholders to the exclusion of other stakeholders.

BA football club needs to be part of the community in which it exists and so the board shouldconsider the other stakeholders.

CThe board should conclude that objectors to the new stadium have a legal course of actionopen to them and if they do not take legal actionthey should ignore them.

DIf the board of directors is seen as acknowledging its responsibility to stakeholders other than shareholders this will enhance the reputation of the club and it will bemore likely that a compromise can be reached with objectors.

EThe board should share information about the new development with the local community only to the extent that it is legally obliged to do so.

Question No: 4

MultipleChoice

Under the COSO Enterprise Risk Management Framework, who is responsible for risk management?

Options

AEvery member of the entity.

BThe board of directors only.

CManagers and directors only.

DThe shareholders.

Question No: 5

MultipleChoice

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

Options

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

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

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

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

Question No: 6

MultipleChoice

JNH is a major corporation that stores its customer database in the Cloud JNH has suffered a data breach that has led to customer credit card details being made available for sale on the internet JNH's Head of Security wishes to analyse network traffic at the cloud-based server in order to gain a better understanding of the manner in which the data was intercepted, but has been refused access.

Which of the following is the most likely explanation for the third-party owner's refusal to assist JNH's Head of Security?

Options

AThe Cloud is impregnable and so the breach must have been elsewhere

BThe network data will not have been stored by the server's owner

CThe server will contain data belonging to other clients

DAdmitting the breach would harm the reputation of the Cloud

Question No: 7

FillInTheBlank

TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.

TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF's cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:

TRF purchased the Big machine, but annual requirements only exceeded 600,000once, in year 3, when 720,000 units of emissions were emitted.

Calculate the amount that the post completion audit showsTRF overpaid for the ownership costs associated with this machine.

Give your answer to the nearest whole $ (in $'000s).

Question No: 8

MultipleChoice

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?

Options

A$62,000 gain

B$95,000 gain

C$88,000 gain

D$16,000 loss

Question No: 9

MultipleChoice

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.

Usinginterestrateparitytheory, what GBP/USD spot rate would you expect to see insix months' time?

Options

AGBP/USD = 1.74

BGBP/USD = 1.78

CGBP/USD = 1.65

DGBP/USD = 1.67

Question No: 10

MultipleChoice

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?

Options

A$62,000 gain

B$95,000 gain

C$88,000 gain

D$16,000 loss

Question No: 11

MultipleChoice

The long-term prospects for inflation in the UK and the USA are 2% and 6% per annum respectively.

The GBP/USD spot rate is currently GBP/USD1.71.

Usingpurchasingpowerparitytheory, what GBP/USD spot rate would you expect to see inthree months' time?

Options

AGBP/USD1.69

BGBP/USD1.73

CGBP/USD1.77

DGBP/USD1.65

Question No: 12

FillInTheBlank

TRF is conducting a post completion audit on an investment in a pollution control machine that has reached the end of its five year useful life.

TRF could have been heavily fined if the machine had failed to keep pace with the output of emissions, measured in units. TRF's cost of capital is 10%. When the machine was purchased, there was a choice of three machines on the market:

TRF purchased the Big machine, but annual requirements only exceeded 600,000once, in year 3, when 720,000 units of emissions were emitted.

Calculate the amount that the post completion audit showsTRF overpaid for the ownership costs associated with this machine.

Give your answer to the nearest whole $ (in $'000s).

Question No: 13

MultipleChoice

YY is a company which generates electricity from alternative energy sources It has just begun constructing a wind farm near a well-known beauty spot The protect has been controversial as campaigners say it will be noisy and unsightly.

The campaigners took legal action but lost the case Some of them have started a campaign of direct action against YY and are physically blocking roads leading to the site and attempting to intimidate YY's staff

YY has hired a security company to help it to protect its staff

Which of the following statements are view in relation to the ethics of this scenario''

Select ALL that apply.

Options

AYY is within its rights to hire the security firm because it has duty of care to its employees

BThe security firm must take care not to use more force against the protestors than is absolutely necessary.

CYY no longer has any duty of care to the protestors since their actions are illegal because they lost their court case

DThe generation of electricity from clean renewable and sustainable sources is too important for the protestors' concerns to be considered

ESince the protestors have already lost their court case they would no longer be ethically justified in engaging in political lobbying to try to get the government to change the law in this area

Free CIMAPRO19-P03-1 Exam Dumps July 2026