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CIMA CIMAPRO19-P03-1 Exam
P3 Risk Management (Page 7 )

Updated On: 12-Feb-2026
Page 7 of 56
PDF with 276 Questions

H Ltd is a logistics company which is likely to be seeking a Stock Exchange listing shortly. The directors wish to strengthen the company's internal controls.
Which of the following statements are valid?

  1. The Board should take direct responsibility itself for all organisational control and avoid delegating.
  2. The Board should ensure that the internal accounting system provides accurate and relevant information.
  3. The Board should ensure that there is regular assessment of the financial impact of contingencies.
  4. The Board should communicate organisational policies only to members of staff who are part of the management team.
  5. Internal Audit should be used to check on the detailed operation of controls in the operating departments.

Answer(s): B,C,E



P Ltd, a service company, is seeking to recruit engineers to work in its maintenance division. Which TWO of the following suggestions will be most likely to help prevent fraud when recruiting the engineers?

  1. Checking that the engineers have previous experience in a similar business.
  2. Checking that the engineers do not belong to a union.
  3. Checking that the engineers have a professional engineering qualification.
  4. Taking up references from previous employers.
  5. Having a defined fraud policy statement that includes recruitment issues.

Answer(s): D,E



Company H operates a fleet of lorries. The Internal Auditor recently conducted an investigation into the transport needs of the company. Their report recommended that the lorries be disposed of, the drivers made redundant, and the distribution of the company's products be outsourced. The type of investigation carried out by the Internal Auditor is best described as a:

  1. Compliance Audit
  2. Economy Audit
  3. Efficiency Audit
  4. Effectiveness Audit

Answer(s): D



Laura is an accounts clerk. She is supposed to sign each invoice as evidence that she has conducted checks against supporting documents. Sometimes Laura signs invoices without making these checks. Terry is a member of the internal audit team. Terry has been told to conduct compliance tests on whether Laura is checking the invoices properly.
Which of the following would give Terry a false sense of assurance that Laura's checks have been operating?

  1. Terry examined a sample of invoices to make sure that they had been signed by Laura. All had been signed.
  2. Terry worked at a spare desk in the accounts department and quietly watched Laura without telling her. She checked every invoice carefully while Terry was present.
  3. Terry selected a sample of purchase invoices and compared each to the supporting documents that Laura is supposed to review. Every one of Terry's invoices was supported by the related documents.
  4. Terry asked Laura a series of open-ended questions about the operation of the purchases system.
    She did not mention anything about detailed checks of invoices against documents.
  5. Terry reviewed a sample of invoices for purchases of plant and equipment and found that Laura had not signed them. Laura explained that she believed that those were authorised by someone else, although the accounts manual indicates that it was her responsibility.

Answer(s): A,B,C



DRAG DROP
The list below has duties performed by risk managers and internal auditors. Show who would carry out the duties assuming the company has both risk managers and internal auditors.

  1. See Explanation section for answer.

Answer(s): A

Explanation:






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