CIMA CIMAPRA19-E02-1 Exam Questions Instant Access

Question 1

X is a major energy company and has discovered substantial onshore shale gas reserves in a rural part of the country. With new "fracking" technology, underground gas production could be profitable, provide jobs for local people and boost the local economy. This would require the purchase of large areas of land, without which the projects could not proceed.

Although local landowners were generally pleased to sell land to X at high prices, the reactions of local residents were less favourable as they were very concerned about the environmental impact.

Althoughtheir powers were limited, their influence on local councils was more significant. Every new fracking site was subject to strict planning controls and local councils controlled this process.

UsingMendelow's stakeholder management theory, which stakeholder group should be categorised as high interest/low power - with a strategy of "keep informed" (unless their power and influencestart to increase)?

ALocal residents

BLocal landowners

CLocal Councils

DDirectors of X

Answer : A

Question 2

The new Chief Executive of P Company has recently announced that there will be significant changes made to how the company operates. He has stated that his vision for the company cannot be achieved within the existing organisational paradigm.

Although the changes are significant, due to increased competitive pressures, the Chief Executive has commented that changes will need to be made quickly.

Which of the following types of change will occur in P Company?

AEvolution

BAdaptation

CReconstruction

DRevolution

Answer : D

Question 3

Various methods of communication are available, including face to face, by telephone or online.

Which THREE of the following interactions are best conducted face to face?

ADiscussion of the proposed strategy for the company between its senior managers.

BBooking hotel accommodation.

CConducting a training session on how to administer life-saving first aid.

DPurchasing a well known brand of printer cartridges.

EArranging the details of a joint venture with a new partner from a foreign country.

Answer : A, C, E

Question 4

Charles Handy described organisational culture as:

AThe way we do things around here

BValues embedded in an organisation

CAn invisible bond which ties the people of the organisation together

DThe way of the employees and their beliefs

Answer : A

Question 5

Porter's Diamond modelsuggests that there are four factors which determine national competitive advantage. The four are listed below.Which has the incorrect definition?

AFactor conditions: includes the availability of raw materials and suitable infrastructure.

BFirm strategy, structure and rivalry: if the home market is very competitive, a company is more likely to be world class.

CDemand conditions: the goods and services have to be demanded internationally.

DRelated and supporting industries: these allow easy access to components and knowledge sharing.

Answer : C

Question 6

The advantagesof embedding the finance function within the business unit include whichTHREE of the following?

AIt allows the accountant to provide information specific to a particular business unit with greater efficiency.

BIt prevents duplication of effort across the organisation.

CIt enables strong relationships to be developed between the accountant and the rest of the management team within a particular business unit.

DIt means that the accountant is able to develop best practice that can be of benefit to the whole company.

EIt allows the accountant to build up detailed local knowledge and understanding of the business unit.

Answer : A, C, E

Question 7

In preparation for listing on the UK stock market a company has started to set up the various committees needed to comply with the UK Corporate Governance Code.

Ithasidentified the need for an Audit Committee and haslisted thecharacteristics below but are not sure if they are all correct.

Which of the options below is NOT a characteristic of the Audit Committee?

ASets the external audit fee

BComprises of non-executive directors

CComprises of a majority of non-exective directors

DRecommends appointment and removal of external auditors

Answer : C

CIMA E2 Managing Performance CIMAPRA19-E02-1 Exam Questions