CIMA Exam CIMAPRA19-P03-1 Topic 3 Question 57 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 57
Topic #: 3

CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW has ten branches located in its home country and has just opened a foreign branch for the first time It has recently made some changes to the structure and implementation of its control system.

Which TWO of the following changes would be most likely to improve the overall control system?

ACW has just opened a bank account in the currency in which the newly opened branch is now operating

BEstablishing an internal audit department

CExcess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments

DPurchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches

EA policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register

Show Suggested Answer

Suggested Answer: B, D

by Vincenza at Sep 14, 2024, 09:31 AM

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Sage

10 months ago

Haha, did someone say 'short-term securities'? I'll take 'ways to embezzle money' for $500, Alex. Definitely go with the audit team on that one.

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Katina

10 months ago

Approving invoices at the branch level and sending a list to head office? That's just asking for trouble. I'd rather see stronger centralized controls and oversight.

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Mari

9 months ago

D) Purchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches

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Veta

9 months ago

C) Excess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments

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Linn

9 months ago

B) Establishing an internal audit department

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Loren

10 months ago

A) CW has just opened a bank account in the currency in which the newly opened branch is now operating

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Lorrine

10 months ago

Investing excess funds without proper segregation of duties is a recipe for disaster. I'd steer clear of that option and go with the audit team and physical inventory instead.

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Kimi

9 months ago

Yeah, investing excess funds without proper segregation of duties is risky. It's better to focus on the audit team and physical inventory.

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Pearly

9 months ago

I think completing a physical inventory of non-current assets annually is a good idea for better control.

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Beata

10 months ago

I agree, having an internal audit department would definitely help improve control.

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Julian

11 months ago

I believe completing a physical inventory of non-current assets annually would also be beneficial. It would ensure accuracy and help prevent any potential misstatements.

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Marguerita

11 months ago

I agree with you, Sol. Having an internal audit department would provide independent oversight and help identify any control weaknesses.

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Eliseo

11 months ago

I agree, those two changes seem like the most logical choices. The internal audit department will provide independent oversight, and the annual inventory reconciliation will keep the asset records up-to-date.

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Domonique

10 months ago

E) A policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register

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Talia

10 months ago

I think having an internal audit department is crucial for oversight.

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Verdell

10 months ago

B) Establishing an internal audit department

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Angella

10 months ago

A) CW has just opened a bank account in the currency in which the newly opened branch is now operating

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Sol

11 months ago

I think establishing an internal audit department would really improve the control system.

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Justine

11 months ago

Establishing an internal audit department and completing an annual physical inventory of non-current assets sounds like a great way to improve the control system. This will help ensure accuracy and catch any discrepancies.

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Alline

11 months ago

I agree, completing an annual physical inventory of non-current assets will also help in maintaining accurate records and identifying any discrepancies.

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Lettie

11 months ago

Yes, having an internal audit department will definitely help with ensuring compliance and detecting any irregularities.

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