Free CIMAPRO19-P03-1 Exam Braindumps
P3 Risk Management Questions 111–115 (page: 24)

D plc is a public relations company. Shares in D plc have recently been listed on the UK stock exchange.
D plc has an internal audit department that reports to the Chief Executive Officer (CEO). The CEO is considering outsourcing internal audit to an audit firm, which would not be the firm that conducts D plc's external audit.
Identify THREE advantages to D plc of outsourcing internal audit in this way.

DRAG DROP
A government department is conducting a value for money audit on a school. The school's pupils sit leaving exams. Classify each of the audit tests as either economy and efficiency or effectiveness.

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?

DRAG DROP
Move the category of risk to the box beside the risk description it best matches.

DRAG DROP
Z is a multinational pharmaceuticals company with operations across Europe, America and Asia. It is currently investigating the possibility of setting up a chemical and specialist production facility in South Americ A. This would be a multi $billion investment. What steps should Z take to manage the following risks in this long term venture.