CIMA Exam CIMAPRO19-P03-1 Topic 7 Question 74 Discussion

Actual exam question for CIMA's CIMAPRO19-P03-1 exam

Question #: 74
Topic #: 7

CW is a large company in the food production industry. It has grown over the years by the acquisition of several smaller rivals CW has ten branches located in its home country and has just opened a foreign branch for the first time It has recently made some changes to the structure and implementation of its control system.

Which TWO of the following changes would be most likely to improve the overall control system?

ACW has just opened a bank account in the currency in which the newly opened branch is now operating

BEstablishing an internal audit department

CExcess funds are now invested, by the finance director, in short-term securities The finance director initiates buy and sell transactions and she also receives and retains all correspondence relating to the investments

DPurchase invoices are now approved for payment at branches and a list of approved invoices are sent to head office for payment The invoices, supporting documentation and suppliers' statements are retained at the branches

EA policy has been initiated to complete a physical inventory of all non-current assets at least annually This is then reconciled with the non-current asset register

Show Suggested Answer

Suggested Answer: B, D

by Dierdre at Aug 03, 2024, 06:08 AM

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Ernie

3 months ago

You know what they say, 'cash is king.' Investing excess funds in short-term securities is a bit risky if the finance director is the only one handling it.

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Lashawna

3 months ago

Ha! I bet the finance director is having a field day with those investment transactions. Talk about a recipe for disaster!

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Albert

3 months ago

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Theron

3 months ago

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4 months ago

I agree, an internal audit department is a must. It can also help uncover any fraudulent activities within the company.

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Ceola

4 months ago

User 2

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Ernest

4 months ago

User 1

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Lucia

4 months ago

I believe completing a physical inventory of non-current assets annually would also be beneficial. It would help in detecting any discrepancies and ensure accuracy in the asset register.

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4 months ago

I think establishing an internal audit department would definitely improve the control system.

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