[Jul-2023] Free P3 Exam Questions P3 Actual Free Exam Questions
Verified P3 dumps and 287 unique questions
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NEW QUESTION # 23
X has just set up a small public relations company. The company is growing last and already has eight employees. X"s accountant has said she needs to make sure she has good internal controls.
X disagrees and says that there are very few issues that could cause weaknesses in internal control in her type of business.
Which THREE of the following statements are correct?
- A. Employees can try to circumvent internal controls
- B. A small business which has just started up does not need internal controls.
- C. Only manufacturing companies need internal controls
- D. X ill usually be working in the office so there is no risk of any fraud. Therefore, the company does not need internal controls
- E. The employees may feel they are not trusted if more controls are put in place
- F. internal controls could stop the company getting good new clients as it will slow down the process by having more checks in place
Answer: A,E,F
NEW QUESTION # 24
Which THREE of the following form part of the role of Internal Audit?
- A. Carrying out special investigations of risk.
- B. Monitoring the effectiveness of controls implemented by operational management
- C. Working with operational management teams to devise new controls to help minimise risk to the business.
- D. Implementing internal controls which address the key business risks identified by the risk management team
- E. Working with operational management teams to help identify risks to the business.
- F. Providing training to operational management on the identification of risk
Answer: B,E,F
NEW QUESTION # 25
C is an accounts clerKwho is supposed to sign each invoice as evidence that she has conducted checks against supporting documents Sometimes C signs invoices without making these checks D is a member of the internal audit team He has been told to conduct compliance tests on whether C is checking the invoices property Which of the following would grve D a false sense of assurance that C's checks have been in operation?
Select ALL that appry
- A. D examined a sample of invoices to make sure that they had been signed by C AH had been signed selected a sample of purchase invoices and compared each to the supporting documents that C is supposed to review Every one of D's invoices was supported by the related documents
- B. asked C a series of open-ended questions about the operation of the purchases system She did not mention anything about detailed checks of invoices against documents
- C. D worked at a spare desk in the accounts department and quietly watched C without telling her She checked every invoice carefully while D was present
- D. D reviewed a sample of invoices for purchases of plant and equipment and found that C had not signed them C explained that she believed that those were authonsed by someone else although the accounts manual indicates that it was her responsibility
Answer: A,B,C
NEW QUESTION # 26
Smalltown had a problem with people parking cars on the town's mam shopping streets instead of in the nearby car parks The parked cars created congestion and made it difficult for delivery vehicles to unload Smalltown's local government had employed traffic wardens to enforce parking regulations by issuing parking fines to motorists who parked for more than the permitted 30 minutes.
The local government took further action to deal with this problem It banned parking on the busiest streets, it introduced parking charges in the remaining streets and it made it free to park m the town's car parks for up to two hours Fewer people now park cars on the streets because of the charges, but those who do generate significant revenues for the local government Fewer traffic wardens are required and so wage costs have reduced The local goverment auditors have decided to carry out a value for money audit of the parking system Which of the following is a measure of effectiveness?
- A. Parking enforcement costs less than before
- B. Revenues from parking have increased
- C. The remaining traffic wardens are less stressed because they no longer receive abuse by motorists.
- D. The main shopping streets are no longer congested
Answer: D
NEW QUESTION # 27
ABC is a large supermarket chain which also has online shopping and home deliveries It has a 24/7 service which runs on a central server allowing all customers to enter new orders at any time This is a business critical service which, if not available, may lead to customers turning to alternative supermarket chains offering similar services, resulting in immediate turnover loss and possible long term customer loss.
ABC is contemplating the implementation of a hot standby facility, not only to cover for emergency disaster recovery, but also to allow for business continuity, allowing necessary maintenance and updates without service interruption.
Which of the following cybersecurity objectives is ABC concerned about in this scenario?
- A. Integrity of processing
- B. Confidentiality
- C. Integrity of data
- D. Availability
Answer: D
NEW QUESTION # 28
CDE an online ticket sales agent, has unwittingly become an accomplice in cyber crime and is suffering attacks on its own business as a result CDE's website was poorly designed and cyber-attackers have managed to inject the site with malware, so that it collects all of CDE's customer log-in information and enables the cyber-attackers to retrieve it.
The cyber-attackers subsequently use this information to set up Botnet agents in the customers' devices which are then used in a Distributed Denial of Service (DDoS) attack whenever very popular tickets are being placed on sale such as international football matches.
The cyber-attackers secure access to a single portal on the site and buy multiple tickets for subsequent sale on the black market while the DDoS causes all other portals to be overloaded preventing real fans acquiring the tickets at face value.
Which TWO of the following apply in this scenario?
- A. CDE is likely to face significant fines for the breach.
- B. CDE is likely to lose the ticket franchise for international football events
- C. CDE will need to implement a new firewall to prevent this type of attack.
- D. CDE customers will turn to other ticket sources for their tickets
- E. CDE will remain just as profitable selling to the black market as to real fans
Answer: A,C
NEW QUESTION # 29
B is a company with a strong risk appetite. Which of the following are benefits of using the certainty equivalent method of capital investment appraisal in B's case?
- A. It avoids the need for the investor to estimate an appropriate discount rate which reflects the risk of the project cash flows.
- B. More risky projects are more likely to be accepted using this method of appraisal.
- C. A high level of subjective judgment is required from the decision maker.
- D. The method produces the most appropriate results in cases where project cash flows do not increase in risk over time.
- E. By building a risk adjustment into the discount rate, it takes greater account of risk in later time periods.
Answer: A,E
NEW QUESTION # 30
M plc is an IT company that bids for large contracts to sell computer systems and also to service existing systems. M plc's senior management has always set budgets which are hard to achieve and have made no allowances for the recession.
The economy has improved and M plc's senior managers have made the budget even more optimistic. The budgeted sales target has been increased by 40%.
In the past, sales staff have not tried to achieve the budget sales because it was generally believed that the targets were impossible to reach.
M plc has recently appointed a new Sales Director who has decided that sales staff will be dismissed if they fail to meet sales targets for three successive months. He is also looking for higher sales margins than were achieved before.
What are the likely consequences of the new Sales Director's policy?
- A. Sales staff will tender for riskier contracts.
- B. Sales staff will encroach on other sales staff territories to get more work.
- C. Sales staff will be happier in their jobs.
- D. Sales staff will look for new jobs.
- E. Sales staff will feel more settled and secure in their jobs.
Answer: A,B,D
NEW QUESTION # 31
YY is a company which generates electricity from alternative energy sources It has just begun constructing a wind farm near a well-known beauty spot The protect has been controversial as campaigners say it will be noisy and unsightly.
The campaigners took legal action but lost the case Some of them have started a campaign of direct action against YY and are physically blocking roads leading to the site and attempting to intimidate YY's staff YY has hired a security company to help it to protect its staff Which of the following statements are view in relation to the ethics of this scenario'' Select ALL that apply.
- A. YY is within its rights to hire the security firm because it has duty of care to its employees
- B. The security firm must take care not to use more force against the protestors than is absolutely necessary.
- C. Since the protestors have already lost their court case they would no longer be ethically justified in engaging in political lobbying to try to get the government to change the law in this area
- D. The generation of electricity from clean renewable and sustainable sources is too important for the protestors' concerns to be considered
- E. YY no longer has any duty of care to the protestors since their actions are illegal because they lost their court case
Answer: A,B,D
NEW QUESTION # 32
WTW is a global company which produces high-tech equipment such as smart televisions and mobile phones The CFO has just resigned, having been offered a post at a competitor The CFO was well regarded and WTWs share price has fallen in response to the announcement At a board meeting the production director commented that the share price fall is the fault of the nomination committee Which THREE of the following statements are correct?
- A. Most of the members of the nomination committee should be executive directors as they are responsible for ensuring the share price recovers quickly.
- B. The nomination committee should have considered succession planning for directors before the CFO resigned
- C. If the nomination committee had been working effectively the CFO would not have resigned
- D. The nomination committee should prepare a description of the role and capabilities required for the CFO's replacement
- E. When planning the CFO's replacement the nominations committee should consider the diversity of the board
Answer: B,D,E
NEW QUESTION # 33
K has several subsidiary companies. The directors of K's subsidiaries are paid an annual bonus based upon their particular subsidiary's reported profits.
The directors of one of K's subsidiaries are considering the choice between two models of a machine.
Which of the following is most likely to explain the decision to choose model X over model Y?
- A. Model X has a better combination of investment and running costs.
- B. Model X is the less risky investment.
- C. Investing in model X will lead to a higher share price.
- D. Investing in model X will mean the subsidiary will show a higher profit.
Answer: D
NEW QUESTION # 34
An internal audit investigation involved conducting compliance tests on the processing of purchase invoices.
The purchase ledger clerk compares invoices against purchase orders and passes them for payment The invoices are then input into a computerised purchase ledger system The system checks that the supplier has a valid purchase ledger account, as authorised by the chief buyer, before crediting the supplier's account with the value of the invoice.
The internal auditor checked a sample of recorded purchase invoices against their corresponding purchase orders The internal auditor found four cases where invoices could not be agreed to corresponding purchase orders.
What is the potential significance of this compliance error?
- A. The purchase ledger clerk could have ordered goods for her own personal use.
- B. The purchase ledger clerk could make fraudulent payments to herself.
- C. Payments could be made to non-existent suppliers
- D. The discrepancy is a minor one and should be ignored
Answer: B
NEW QUESTION # 35
W is a construction company which undertakes large projects for governments and other clients worldwide.
Following extensive tendering processes, contracts are issued for successful tenders, and projects typically take three to five years to complete. Contracts are normally fixed-price and many have considerable penalty clauses.
Which of the following would be appropriate policies and controls for W to implement?
- A. In order to ensure the maximum chance of winning the contract, tenders always commit W to completing the work at the lowest possible price and in the shortest possible time.
- B. Ensuring a consistent separation of duties between those involved in the preparation of tenders and those involved in the planning of projects.
- C. The project steering committee and project board should receive regular project status reports.
- D. Unsuccessful tenders should be analysed to establish the cause of them failing to be awarded the work and help to avoid future failures.
- E. Ensuring that the minimum legal wage is paid to all workers on the construction sites.
- F. Contract terms should be worded precisely so that additional work is not deemed to form part of the contract.
Answer: C,D,F
NEW QUESTION # 36
The government health service in country H employs well over 100,000 staff in various locations throughout the country. Traditionally, local management has had high levels of autonomy in relation to personnel issues and there are several different human resources (HR) managers located across various regions.
The government has decided to introduce a completely new HR/payroll information system to have just one database containing all relevant information about every staff member on the payroll (start date, job title, salary and all other details) and to use this information to begin streamlining recruitment and HR policies.
The government has outsourced the system's development to a reputable company.
Which of the following are disadvantages associated with this IT project?
- A. There is a risk that significant anomalies in the current system will be highlighted.
- B. The government is very heavily dependent on the contractor to whom this assignment is outsourced and if they do not to perform as required this could have serious consequences.
- C. The amount of data storage space required to run the system may not be available.
- D. There is a risk that the system will not capture all of the existing terms and conditions of staff, thus leading to industrial relations problems later.
- E. The system could make it more difficult to employ specialist medical staff on terms and conditions which are different from the normal terms and conditions available.
- F. Any initial problems in running the system could have serious repercussions as it could lead to, for example, staff not being paid, payroll tax not being properly collected, and similar difficulties.
Answer: B,D,F
NEW QUESTION # 37
UIO sells mobile phones through a cham of 100 shops spread across the country Shop managers have considerable discretion over pncmg and the incentives offered to sales staff Shop managers are evaluated on the monthly contribution from completed sales. Those who exceed targets by more than 10% for three successive months are promoted Those who fail to achieve monthly targets in two successive months lose their jobs Which of the following statements are true of the performance management of UIO's shop managers?
Select ALL that apply.
- A. UIO's shop managers have an incentive to offer excellent customer service
- B. UIO's shop managers are encouraged to sell phones at a loss
- C. UIO's shop managers are encouraged to take risks that may harm UIO
- D. UIO's shop managers have an incentive to develop attractive sates promotions for their shops
- E. UIO's shop managers may have very little sense of loyalty to the company
Answer: B,C,E
NEW QUESTION # 38
M is a listed company. It is hoping to invest in a risky new venture. M has a substantial amount of cash to invest in the venture. M would have found it difficult to raise new finance as it has a high level of gearing.
Which of the following statements about stakeholders' conflicting interests are true?
- A. The directors would only be exposed to the systematic risk from the investment in the new venture.
- B. M's credit rating is likely to fall as a result of this new venture.
- C. M's diversification will mean less risk for the shareholders.
- D. M's shareholders would only be exposed to the systematic risk from the investment in the new venture.
Answer: B,D
NEW QUESTION # 39
TT is a jewellery manufacturer in country A It makes jewellery from precious metals and stones and sells it to shops in country A and also overseas It is the 3rd largest company in country A with a huge turnover TT has found it very difficult to prevent staff committing fraud and last year the Board was sure that the year end inventory was lower than it should have been Gross profit was also slightly lower than expected Which TWO of the following internal controls would be most effective in helping to reduce staff fraud within TT?
- A. Carry out inventory checks daily to make sure the correct quantity of materials is being used every day and the correct number of items are being produced
- B. Install-several CCTV cameras in the workshop
- C. Employ two more managers to watch the staff working and look for them stealing items
- D. Perform random checks of staff bags as they leave work and ensure the staff all wear overalls provided by the company in the workshop Their own clothes must be left in lockers during working hours
- E. Have a senior manager such as the Production Director to supervise the workshop at all times
Answer: B,D
NEW QUESTION # 40
Z is a multinational pharmaceuticals company with operations across Europe, America and Asia.
It is currently investigating the possibility of setting up a chemical and specialist production facility in South America. This would be a multi $billion investment. What steps should Z take to manage the following risks in this long term venture.
Answer:
Explanation:
NEW QUESTION # 41
A's directors do not believe that they always get value for money from their investment in capital projects.
Over the past decade the company has invested in 55 projects that have cost more than $1m. They are considering introducing a system of post completion audit to see if this will help them to understand any problems they have had with projects in the past. They hope to use the results of the post completion audits to significantly improve the results of their capital investments State whether you agree or disagree with the points raised by A's directors.
Answer:
Explanation:
NEW QUESTION # 42
The senior manager in the accounts department is going on annual leave for three weeks and Jo, a supervisor is being put in charge of the department for that time.
Which TWO of the following statements are correct?
- A. Authorisation of exceptional overtime due to the year end which takes place while the senior manager is on leave should be postponed until the senior manager returns
- B. Authorisation of expenses should wait until the senior manager returns.
- C. The annual staff appraisals should be postponed until the senior manager returns
- D. Jo should not have all of the same authority as the senior manager
- E. Job interviews for an office junior should be cancelled until the senior manager returns.
Answer: A,C
NEW QUESTION # 43
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