QUESTION: 9

K is a large mining company. In its risk report it states that there is a risk of accidents and injury because of the nature of the industry. It states that it has staff training in place and complies with all Health and Safety regulations but in spite of this there will still be a residual risk that accidents and injuries may occur.
Which of the following statements are correct?

The shareholders should not invest because there is still a residual risk.
The directors are avoiding their responsibilities by saying there is a residual risk.
Some risks cannot be eliminated.
Accepting a residual risk does not imply the company is reckless.
Most companies in this industry will say something similar in their risk report.

Answer(s): C,D,E

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QUESTION: 10

P Ltd manufactures and sells electrical goods through retail outlets. N is P Ltd's Sales Director. He has been recently promoted from a senior sales position with P Ltd. He has been forced to spend the first six months as Sales Director on dealing with an administrative mess left behind by the previous sales director.
You are a Senior Management Accountant at P Ltd. You have worked with N for many years. N has worked hard and has made many changes that have brought significant benefit to the business.
N has asked you to postpone the recording of some purchase invoices so that he will meet his quarterly targets on profit margin.
What should you do?

Collect all the facts, distance yourself from the situation but say nothing.
Write up the facts of the issue and put it on your files.
Document the situation and present the facts to your manager.
Do nothing, no rules have been broken, tell N that you cannot do as he asks and that he needs to abide by the professional codes.

Answer(s): D

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QUESTION: 11

DRAG DROP
V buys vegetables and fruit from three farms located in a different part of V's country and sells them to large supermarket chains.
A recent newspaper magazine had an article on these farms showing that the farms employ illegal immigrants whose status was used by the factory's owners to force them to work for low wages and in unpleasant conditions. They are forced to live in small overcrowded caravans with no running water. They are also given meals which are cold and poor quality. These farms are located in a developed country with strong labour laws.
Classify each of the following statements as true or false.

See Explanation section for answer.

Answer(s): A

Explanation:

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QUESTION: 12

W is a construction company which undertakes large projects for governments and other clients worldwide. Following extensive tendering processes, contracts are issued for successful tenders, and projects typically take three to five years to complete. Contracts are normally fixed-price and many have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?

Unsuccessful tenders should be analysed to establish the cause of them failing to be awarded the work and help to avoid future failures.
Ensuring a consistent separation of duties between those involved in the preparation of tenders and those involved in the planning of projects.
Ensuring that the minimum legal wage is paid to all workers on the construction sites.
In order to ensure the maximum chance of winning the contract, tenders always commit W to completing the work at the lowest possible price and in the shortest possible time.
Contract terms should be worded precisely so that additional work is not deemed to form part of the contract.
The project steering committee and project board should receive regular project status reports.

Answer(s): A,E,F

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QUESTION: 9

QUESTION: 10

QUESTION: 11

Explanation:

QUESTION: 12

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