Question No. 1

A Firewall is an element of a company's Information Technology infrastructure.

WhichTHREEof the following arecharacteristics of a Firewall?

AA Firewall determines the boundary of the 'Trusted' components of the company's Information Technology infrastructure.

BA Firewall protects sensitive data against accidental or malicious damage.

CA Firewall protects the computer suite against physical attack.

DA Firewall protects against unauthorised network access.

EA Firewall protects against viruses.

FA Firewall canscreen every message coming into or out of the company network looking for key words, or attachments.

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Correct Answer: A, D, F

Question No. 2

Zia is an accountant and wishes to take out a Forward Rate Agreement (FRA)as a hedging instrument. The company treasurer has advised that a short-term interest rate (STIR)future would be better.

Which of the following is true of an STIR?

AA STIR can be tailored to the exact needs of the company.

BA STIR is flexible and the position can be closed quickly and easily.

CA STIR must be kept for the whole duration of the contract.

DIf interest rates have gone down the price of the future will have fallen.

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Correct Answer: B

Question No. 3

The management of U isreviewing internal controls throughout the company. Ithasnoted the following:-

1. In the trade receivables section, journal adjustments are made by the clerks, without any reference to their supervisor. Journal adjustments may relate to sales returns, discounts allowed, or transfers between accounts.

2. In the purchasing department, the purchasing manager selects and approves all suppliers, astheyarethe only person with sufficient experience to do so. They usea very limited number of suppliers becausethey can rely on these suppliers to provide goods of the quality required at a competitive price. They donot keep any documents in relation to negotiations with other potential suppliers or other quotes obtained.

In relation to the above, which of the following statements are valid?

AThe fact that the purchasing manager uses a very small number of suppliers is, in itself, a sign of poor internal controls.

BIt is acceptable for clerks in the trade receivables section to make journal adjustments without authorisation provided the amounts involved are not material to U's financial statements.

CIt is acceptable for clerks in the trade receivable section to make journal adjustments without authorisation, provided they have no access to cash receipts.

DThe fact that the purchasing manager does not keep documentation relating to negotiations with suppliers, or potential suppliers,is evidence that they are involved in fraudulent activity.

EClerks making journal adjustments without reference to their supervisor is evidence of inadequate separation of duties.

FThe way the role of purchasing manager is carried out in U increases the chance that the company will fall victim to fraudulent activity.

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Correct Answer: E, F

Question No. 4

Which of the following statements concerning the role of the Audit Committeeis correct?

AThe Audit Committee should provide arrangements for whistle blowing.

BThe Audit Committee should design the system of internal controls.

CThe Audit Committee should engage consultants to carry out business reviews.

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

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

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

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Correct Answer: A, D, E

Question No. 5

A UK based company is considering an investment of GB1,000,000 in a project in the US

AIt is anticipated that the following cash flows will arise from this project.
The cash flows will be either US$400,000 with a probability of 40% or US$700,000 with a probability of 60% for each of the next three years; remitted to the UKat the end of each year.
Currently GB1.00 is worth US$1.30.
The expected inflation rates in the two countries over the next four years are 2% in the UK and 4% in the US.
Applying the Purchasing Power Parity Theory, which of the following represents the expected net present value of the project in GP (to the nearest whole pound)?

AGB287,639

BGB391,640

CGB(111,973)

DGB554,047

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Correct Answer: A, A

Free CIMA CIMAPRA19-P03-1 Exam Actual Questions

The questions for CIMAPRA19-P03-1 were last updated On Dec 20, 2024