T2Z company fabricates and welds gas pipelines and boilers, and they are involved with coal extraction in different countries. T2Z company is financed purely by equity and has a large cash balance with no debt. It has come to the attention of the Board that the future price of coal is forecast to fall, as renewable energy sources become more reliable Which ONE of the following risks would you identify as most critical for T2Z company?

A. Commodity price risk

B. Financial risk

C. Production risk

D. Project risk

(1) 2. Risk analysis includes evaluating risks by assessing the likelihood of the risks occurring. What is the second factor to be evaluated?

A. Chance

B. Downside

C. Impact

D. Root cause analysis

(1) 3. ZYX company is a digital printing company. They operate solely through their website and allow organisations and individuals to set up an account and upload digital images directly from various mobile devices to be printed in various way (on mugs, t-shirts, phone cases and even on photo paper). ZYX company has an informal approach to planning and believe that flexibility in developing product ideas is the key to their success so far in the industry Which ONE of the following is biggest risk to ZYX company from this approach to strategic planning?

A. A rigid approach stifling creative productive ideas

B. Failure to react to a dynamic environment

C. Difficulty forecasting

D. A rigid approach to sales channels

(1) 4. An anti-fraud culture, risk awareness, whistleblowing and sound internal controls are examples of what? A. Fraud detection B. Fraud prevention C. Fraud response D. Fraud risk indicators (1) [CONFIDENTIAL] Page 5 of 12 [TURN OVER] 5. Which one of the following ethical principles focus on being straightforward, honest and trustworthy? A. Confidentiality B. Integrity C. Objectivity D. Professional competence (1) 6. Risk of bad debts normally occurring at year- end usually range between 2.5% to 5%. Which one of the following techniques will best remedy this risk. A. Accept B. Avoid C. Reduce D. Transfer (1) 7. The Finance Director of XYZ does not believe that they always get value for money from their investment in capital projects. He has suggested introducing a system of post-completion audit. Which ONE of the following are true regarding a post-completion audit? A. It may be difficult to introduce post completion audits. B. Only those projects starting after the audit system was introduced should be audited. C. Post completion audits cannot be conducted until the project has reached its end. D. Project sponsors should be held liable for all negative findings from post completion audits (1) 8. The Risk Committee chairman of the company is concerned about fraud. Segregation of duties, controls over inputs, processing and outputs and physical security of assets reduces which one of the following: A. Dishonesty as a condition for fraud B. Errors. C. Motive for fraud D. Opportunity for fraud (1) 9. What is NOT part of the CIMA Risk Management cycle? A. Assessment of Risks B. Development of Risk Management Strategy C. Evaluation of Risks D. Identification of Risks (1) 10.Sols Paint Company are manufacturers of paints and one the ingredients used is toxic. The supplier of the key component is in a developing country, which in turn, results in low labour costs. They also have a great deal of expertise in handling toxic chemicals, and they follow several protocols in order to keep waste to a minimum. However, there have been allegations that rivers located near the supplier are being polluted with toxic waste from the chemicals, causing viral outbreaks in surrounding communities. The supplier has informed Sols Paint Company that price increases are likely to happen, since safe storage of the chemical is becoming more expensive. Which ONE of the following represent strategic risks to Sols Paint Company? A. The developing country in which the supplier is based introduces a minimum wage. B. Pollution from local rivers is proven to be the result of the suppliers processes and waste. C. The suppliers storage facilities increase in price. D. The supplier is handling toxic chemicals. (1) [CONFIDENTIAL] Page 6 of 12 [TURN OVER] 11.Risks can offer opportunities to strive as well as threats to an organisation and hence it may not be necessary to eliminate all risks. Select the correct option A. True B. False (1) 12. In order for managers to operate the internal controls they need information and therefore a good information system needs to be set up. The Operations manager has indicated that he believes the requirements of good information are: i) Information needs to be relevant to the actions being taken. ii) Information should be accurate. iii) Information should only be understandable to a select few in the company. iv) Information should be timely available. v) Information should be standardised, and it is best if managers do not request additional Management Information Systems (MIS) reports. Which of the above are requirements of good information? A. i, ii, and iii B. i, ii and iv C. i, ii, iii and v D. ii, iv and v (1) 13.Checking the calculations such as the figures on the invoice and recalculating the total amount due and any discounts afforded on the invoice before sending it to a customer (sales invoice) or before approving for payment (purchase invoice) is an example of what organisational control: A. Accounting control B. Physical control C. Segregation of duties D. Supervision (1) 14.Which of the following is a compliance audit test (control test) when auditing purchases? A. Inspect a sample of purchase invoices and agree the information to the corresponding purchase order and accounting records. B. Observe the receipt of goods and the process followed to receive and store the goods and compare that to the company policy and procedures document. C. Perform analytical procedures confirming year-on-year variations for purchases per inventory item. D. Reconcile the sales ledger and supplier/ creditor ledger. (1) 15.DTY Travel company is considering the introduction of new holiday package to Korea. What should DTY Travel do immediately? A. Acquire a profitable competitor already offering holiday packages to Korea. B. Carry out a marketplace review. C. Outsource the sales function to a team of dedicated specialists with knowledge of the destination. D. Target a niche element of the market by selling expensive and luxurious travel packages