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CIMA Exam CIMAPRA19-P03-1 Topic 4 Question 52 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam
Question #: 52
Topic #: 4
[All CIMAPRA19-P03-1 Questions]

T is an accountant who has been accused of professional incompetence T agreed to advise a client on currency management and the client lost a great deal of money when a large foreign currency trade receivable declined in value without having been hedged.

Which of the following factors strengthens the case that T has been incompetent?

Select ALL that apply

Show Suggested Answer Hide Answer
Suggested Answer: B, C, D

by Angelo at Aug 05, 2024, 08:00 PM

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Verda
24 days ago
I'm just gonna throw this out there - maybe T was too busy playing Fortnite to worry about that pesky 'continuing professional development' stuff. Jokes aside, B and D are the real killers here. Sounds like T needs to brush up on their currency management skills. Or maybe just stick to balancing the books.
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Veda
13 hours ago
A) T had been too busy to stay up to date with continuing professional development requirements
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Alyce
27 days ago
Hmm, I'm not so sure about C. If T had done their due diligence and determined hedging was too expensive, that could be a valid defense. But B and D definitely make T look incompetent. Reminds me of the old saying, 'An ounce of prevention is worth a pound of currency losses.'
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Rosendo
2 days ago
C) T had studied all relevant economic forecasts and had concluded that it would be too expensive to hedge this receivable
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Judy
20 days ago
A) T had been too busy to stay up to date with continuing professional development requirements
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Daron
2 months ago
I agree, B and D are the key factors here. Not staying up to date with CPD requirements (A) is bad, but the real nail in the coffin is the client's competitors successfully hedging. T really dropped the ball on this one.
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Karrie
17 days ago
D) T had offered the client two alternatives showing the costs and benefits of hedging the position, but did not strongly recommend either alternative
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Mi
18 days ago
B) Since the loss the client's chief executive has spoken to her business contacts in the industry and all had hedged against a decline in this currency
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Helaine
2 months ago
Wow, this is a tough one. I think options B and D are the biggest red flags here. If the client's competitors all hedged successfully, that really highlights T's incompetence. And not strongly recommending either option? Yikes, that's pretty damning.
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Dean
4 days ago
And option D is also concerning, not strongly recommending either option is a big issue.
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Tish
23 days ago
Yeah, it's a major red flag that the client's competitors all hedged successfully.
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Rodrigo
24 days ago
I agree, option B definitely shows T's incompetence.
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Sonia
2 months ago
I see your points, but I think factor E also plays a role in determining T's incompetence.
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Becky
2 months ago
I disagree, I believe factors C and D are more relevant in this situation.
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Lonna
2 months ago
I think factors A and B strengthen the case against T.
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