CIMAPRO19-P03-1 Exam - Topic 7 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 74
Topic #: 7

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 Dierdre at Aug 03, 2024, 06:08 AM

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Larae

3 months ago

Opening a bank account in the local currency is a smart move!

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Telma

3 months ago

Investing excess funds in short-term securities could be risky.

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Joesph

3 months ago

Wait, are they really going to keep all those invoices at the branches?

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Leoma

4 months ago

I think the physical inventory policy is a must.

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Eliz

4 months ago

Establishing an internal audit department sounds solid!

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Delisa

4 months ago

I recall a practice question where we talked about invoice approvals. Option D seems like it could help with accountability, but I’m not convinced it’s the best choice overall.

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Antonio

4 months ago

I think option E about the physical inventory is important too, but I wonder if it’s as impactful as establishing an internal audit department.

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Emile

4 months ago

I'm not entirely sure, but I feel like having a bank account in the local currency (option A) could help with managing foreign transactions better.

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Tasia

5 months ago

I remember we discussed how internal audits can really enhance control systems, so I think option B might be a strong choice.

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Kanisha

5 months ago

I feel pretty confident about this one. The key is identifying the changes that strengthen oversight, segregation of duties, and verification processes. The internal audit department and asset reconciliation seem like the best choices to improve the overall control system.

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Salena

5 months ago

I'm a bit confused about the change with the finance director handling the investment transactions. That seems like it could weaken the controls, but I'll need to think through the implications more carefully.

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Ma

5 months ago

Okay, let's see. The question is asking which two changes would most likely improve CW's overall control system. I think establishing an internal audit department and reconciling the physical inventory with the asset register are good options.

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Fletcher

5 months ago

This question seems straightforward, but I want to make sure I understand the key details about CW's control system changes before selecting my answers.

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Felix

5 months ago

The change with approving invoices at the branches and sending the documentation to head office is interesting. That could improve efficiency, but I'd want to make sure there are still adequate checks and balances in place.

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Emiko

5 months ago

The test execution status table provides a lot of useful information, but I'm not sure how to interpret the risk reduction percentages. I'll need to think this through carefully.

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Yuette

5 months ago

Hmm, I'm not entirely sure about this one. I'll have to think it through carefully. Maybe Incident Management could also be responsible for first-line support?

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Ernie

1 year ago

You know what they say, 'cash is king.' Investing excess funds in short-term securities is a bit risky if the finance director is the only one handling it.

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Lashawna

1 year ago

Ha! I bet the finance director is having a field day with those investment transactions. Talk about a recipe for disaster!

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Albert

1 year ago

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Theron

1 year ago

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Laurena

2 years ago

The policy to complete a physical inventory of all non-current assets annually is a good idea too. It will help keep track of the company's assets and ensure they are properly accounted for.

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Pamella

1 year 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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Charlesetta

1 year 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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Ressie

1 year ago

B) Establishing an internal audit department

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Elizabeth

1 year 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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Emerson

2 years ago

I agree, an internal audit department is a must. It can also help uncover any fraudulent activities within the company.

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Ceola

2 years ago

User 2

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Ernest

2 years ago

User 1

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Lucia

2 years ago

I believe completing a physical inventory of non-current assets annually would also be beneficial. It would help in detecting any discrepancies and ensure accuracy in the asset register.

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Gilma

2 years ago

Establishing an internal audit department seems like the most obvious choice. It will help ensure the control system is functioning properly and identify any potential issues.

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Lashawn

1 year ago

A: That's a good point, it would provide more oversight on the company's finances.

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Carissa

1 year ago

B: I think investing excess funds in short-term securities could also help improve control.

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Tarra

2 years ago

A: I agree, having an internal audit department would definitely improve the control system.

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Emmett

2 years ago

I agree with you, Glory. Having an internal audit department would provide independent oversight and ensure compliance with policies and procedures.

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Glory

2 years ago

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

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