CIMA CIMAPRA19-P03-1 Exam Questions Instant Access

Question 1

Systems Development Lifecycle(SDLC) is used to manage risk within the development of new computer systems.

WhichTHREEof the following areappropriate controls to manage risk within theSDLC Process?

AWhen planning the new system, a clear business case must be approved specifying functionality, data transformation, expected costs and benefits.

BWhen designing the new system, controls must be put in place to ensure that all the functionalities of the old system are replicated.

CWhen developing the new system, the developers must follow defined programming standards and carry out component test to specified test harness outputs.

DWhen doing the analysis for the new system particular care should be taken over the data specification, transformation and manipulation, ensuring that expected outputs are defined and that such output meets the needs and expectations of the business users.

EWhen the implementation of the new system is taking place, parallel running must be undertaken to ensure the output for the new system exactly matches that from the old system.

FThe Post Completion Review should take place immediately after the implementation while all the facts are still fresh in everyone's minds.

Answer : A, C, D

Question 2

B is a family run security company with a number of prestigious clients who rely onitto maintain online access to their CCTV and alarm systems and respond to any detected intrusions or malfunctions.

Itdesigns and installs security systems for a number of UHNW(Ultra High Net Worth) individuals who may have several seasonal and city residences largely unoccupied for many months of the year.

B's reputation as 100% secure is crucial toitson-going success in this very specialised marketplace.

SelectTHREE factors which should be given prominence inB'sfraud risk management strategy.

ABshould carry outbackground security, health and financialchecks on all employees, their immediate family members and associates on an annual basis.

BB should ask new employees to fill in a declaration that they are honest and have no criminal convictions for dishonesty. That can be filed as evidence that the company took this precaution.

CBshould inform clients that they have a stringent anti-fraud policy.

DB should have an active whistle-blower policy whereby all staff are encouraged by positive reward to report any suspicions they may have about other employees.

EB should ensure that employees whodesign or install security systems are not involved with the operation of those systems once implemented.

FB Should revise and publishtheir fraud policy document to employeesevery three months, highlighting any new elementsandindustry developments.

Answer : A, D, F

Question 3

Company W produces mobile phone components and has recently tendered for a substantial contract. The results of the tendering process will not become available until three months from now. If the company is successful it will require 2,000 units of a commodity which is currently traded in an open commodity market for $740 per unit. However, there has been speculation that this commodity could increase substantially in price over the next three months and so the company is considering purchasing the commodity now and storing it for three months.

The funds to buy the commodity would be borrowed at an annual interest rate of 7% and the storage cost of the product would be $5.40 per unit per month. The storage costs would be paid at the end of the three month storage period.

Which of the following represents the gain or loss (to the nearest thousand dollars) that will accrue to Company W assuming that the price of the commodity rises to $800 in three months' time?

A$62,000 gain

B$95,000 gain

C$88,000 gain

D$16,000 loss

Answer : A

Question 4

DFG's home currency is the D$.

DFG is heavily exposed to the exchange rate between the D$ and the L$, country L's currency. DFG's treasurer has noted the following:

* Inflation has been running at 5% in DFG's home country and 8% in country L

* Interest rates are 7% in DFG's home country and 11% in country L

* The spot rate is D$1.0000 = L$2.1000 and the three month forward rate is D$1.0 = L$2.1196

Which of the following statements is consistent with these figures?

AInterest rates are expected to continue unchanged, but country L's inflation rate will increase in proportion to the inflation rate in DFG's home country.

BInterest rates are expected to continue unchanged, but country L's inflation rate will decrease in proportion to the inflation rate inDFG's home country.

CCountry L's interest rate is expected to decline relative to that of DFG's home country and inflation rates are expected to continue unchanged.

DCountry L's interest rate is expected to increase relative to that of DFG's home country and inflation rates are expected to continue unchanged.

Answer : A

Question 5

When a new computer system is being implemented there are several possible methods for managing the changeover from the old systemtothe new system.

WhichTHREE of the following are true?

APhased changeover is the safest and slowest method of changeover.

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

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

DParallel 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.

EDirect changeover, or Big Bang is only usedwhen the systems are significantly different such that comparing the outputs of the two systems is largely irrelevant.

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

Answer : B, D, F

Question 6

HJK is a retailer, with more than 40 shops around the country. The directors suspect that a serious fraud has occurred at one of the branches and a team of internal auditors has been sent to investigate.

An analytical review investigation shows that sales revenue is in line with budget, but overtime payments to shop staff exceed budget by 20%.

How should the internal audit team proceed?

AConduct additional detailed testing on overtime payments.

BConduct additional detailed testing of all figures.

CIncrease the evaluation of inherent risk.

DIncrease the evaluation of control risk.

Answer : A

Question 7

JHU has recently completed an eight year project. The project was evaluated at a discount rate of 10% and was accepted because the net present value was $18 million.

In year 3 of the project there was a significant unexpected repair arising because of the implementation stage of the project was rushed and some checks on equipment were skipped to save time. The cost of this was $8 million.

In year 8 of the project the costs of dismantling the project were $11 million more than anticipated because of unexpected changes to the law concerning disposal of industrial scrap.

How should these findings be reflected in the post completion audit?

APoor project management cost the entity $6 million, to the nearest million.

BPoor project management cost the entity $11 million, to the nearest million.

CPoor project management cost the entity $5 million, to the nearest million.

DPoor project management cost the entity $16 million, to the nearest million.

Answer : A

CIMA P3 Risk Management (Online) CIMAPRA19-P03-1 Exam Questions