Free Access CIMA.P3.v2022-04-01.q119 Practice Test (Page 5)

Question 16

M built a large factory last year and it has just been completed. The initial outflows on this project have a present value of $400 million and the entire project has a net present value of $30 million.
The initial phase of the project caused problems and there was an overspend of $35 million as there was unstable soil. The foundations had to be underpinned with large steel bars to ensure the building would be safe. There was no other suitable site for the project.
The construction could not be abandoned as the site would have had very little commercial value.
The Internal Audit department has been asked to carry out a post completion audit. What issues should it concentrate on?

A.The audit should look at documentation to ensure proper procedures were followed at all stages of the project.

B.The audit should consider the initial survey report when the land was purchased to see if the survey mentioned the unstable soil.

C.The audit should consider whether it should have built the factory without underpinning and sold it on quickly.

D.The audit should consider what lessons could be learned for future projects.

E.The audit should find out who was to blame for the project being over budget.

Question 17

The Committee of Sponsoring Organisations (COSO) outlined six key principles of Enterprise Risk Management (ERM).
Which of the following are COSO key principles?

A.The creation of a risk aware culture.

B.A comprehensive and holistic approach to risk management.

C.Risk management is the responsibility of the risk committee.

D.Consideration of the main risk only which is financial risk.

E.Consideration of risk management in the context of business strategy.

Question 18

When a new computer system is being implemented there are several possible methods for managing the changeover from the old system to the new system.
Which THREE of the following are true?

A.Phased changeover is the safest and slowest method of changeover.

B.Direct changeover, or Big Bang is only used when the systems are significantly different such that comparing the outputs of the two systems is largely irrelevant.

C.All methods of changeover carry high risk and it is the preparation, consideration of data compatibility and data cleansing before the changeover which has the biggest impact on the smoothness of the transition.

D.Pilot changeover moves the simplest part of the business to the new system first.

E.Parallel running involves keeping the old system running, normally until certain data retention criteria are met or confidence is gained, while the new system deals with the new workload. Data input is usually carried out on both systems.

F.Phased changeover moves individual portions of the business to the new system one at a time.

Question 19

Which of the following statements concerning the role of the Audit Committee is correct?

A.The Audit Committee should engage consultants to carry out business reviews.

B.The Audit Committee should decide annually whether it needs an external audit function.

C.The Audit Committee should decide annually whether it needs an internal audit function.

D.The Audit Committee should design the system of internal controls.

E.The Audit Committee should review and monitor the effectiveness of the company's internal audit function.

F.The Audit Committee should provide arrangements for whistle blowing.

Question 20

DFR is an online retailer that sells picture frames The software running on DFR's website enables customers to log in and make purchases by inputting an email address as a user name and a password that must contain at least eight characters, including upper and lower case letters, numbers and punctuation marks (e.g. £, $ or!) Once logged in, customers can check previous orders that they have placed.
Customers can also use DFR's website to change personal details, including credit card numbers and delivery addresses Whenever they wish to use those facilities, the software sends a text message containing a six-digit number to their mobile phones They must input that number before the system will accept changes to their personal details Which TWO of the following statements are correct?

A.It is illogical to have different security measures in place for orders and for access to personal details.

B.The software treats customers' personal details as being more sensitive than their ordering histories

C.The software should never show the whole of a customer's credit card number on screen, even if the customer has logged in and input the six-digit number.

D.The arrangement with the text message will have no effect on the security associated with changing personal details

E.Customers should be able to update the mobile phone numbers in their DFR accounts using only their email addresses and passwords for access

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Question 16

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Question 18

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Question 20

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