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CIMA CIMAPRO19-P03-1 Exam
P3 Risk Management (Page 4 )

Updated On: 12-Feb-2026
Page 4 of 56
PDF with 276 Questions

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.

  1. See Explanation section for answer.

Answer(s): A

Explanation:



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?

  1. Unsuccessful tenders should be analysed to establish the cause of them failing to be awarded the work and help to avoid future failures.
  2. Ensuring a consistent separation of duties between those involved in the preparation of tenders and those involved in the planning of projects.
  3. Ensuring that the minimum legal wage is paid to all workers on the construction sites.
  4. 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.
  5. Contract terms should be worded precisely so that additional work is not deemed to form part of the contract.
  6. The project steering committee and project board should receive regular project status reports.

Answer(s): A,E,F



DRAG DROP
H sells machinery and also associated services, such as advice and repairs. H's industry is going through considerable transformation.
Classify each of the examples of information available to H's management as strategic, operational or of having little value.

  1. See Explanation section for answer.

Answer(s): A

Explanation:



H Ltd is a company providing postal and courier services to small businesses. Customers pay a monthly or annual subscription fee to use the service, plus a very small fee for each item delivered. A year ago, H employed a new sales team. Their remuneration is dependent on the number of new customers they sign up. Sales increased dramatically in the first six months, but now difficulties are emerging such as new customers dropping their subscription once the initial period has expired; subscriber direct debits being returned unpaid; subscribers going out of business and other similar issues.
Which of the following would be appropriate to help resolve these problems?

  1. Alter the pricing structure in order to increase the price for sending each item but decrease the subscription element of the fee.
  2. Ensure that a credit check is carried out before a subscriber is accepted.
  3. Reduce the rate of commission payable to any sales person who fails to sign up at least an agreed minimum number of customers each month.
  4. Alter the commission arrangements so that commission is payable only when the subscriber signs up for a second year.
  5. Preparing a monthly report for sales persons detailing the performance of each new customer they have signed up over the previous year.

Answer(s): B,D,E



M plc is an IT company that bids for large contracts to sell computer systems and also to service existing systems. M plc's senior management has always set budgets which are hard to achieve and have made no allowances for the recession. The economy has improved and M plc's senior managers have made the budget even more optimistic. The budgeted sales target has been increased by 40%. In the past, sales staff have not tried to achieve the budget sales because it was generally believed that the targets were impossible to reach.
M plc has recently appointed a new Sales Director who has decided that sales staff will be dismissed if they fail to meet sales targets for three successive months. He is also looking for higher sales margins than were achieved before.
What are the likely consequences of the new Sales Director's policy?

  1. Sales staff will be happier in their jobs.
  2. Sales staff will tender for riskier contracts.
  3. Sales staff will encroach on other sales staff territories to get more work.
  4. Sales staff will look for new jobs.
  5. Sales staff will feel more settled and secure in their jobs.

Answer(s): B,C,D






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