100% Free CIMA CIMAPRA19-P03-1-ENG Practice Test Questions and Answers 2026

With regard to the rote of the audit committee which of the following statements are correct? Select ALL that apply

D plc is a public relations company. Shares in D plc have recently been listed on the UK stock exchange.D plc has an internal audit department that reports to the Chief Executive Officer (CEO). The CEO is considering outsourcing internal audit to an audit firm, whichwould not be the firm that conducts D plc's external audit.Identify THREE advantages to D plc of outsourcing internal audit in this way.

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?

R plc is considering an investment of $1,100,000 in a new machine which is expected to have substantial cash inflows over the next five years.The annual cash flows from this investment and their probability are shown below:Annual cash flow ($)Probability200,000 0.4280,000 0.5350,000 0.1At the end of its five-year life, the asset is expected to sell for $100,000. The cost of capital is 5%.What is the Expected Net Present Value?Give your answer to the nearest whole $.

Having carried out a full capital appraisal for a construction project, HCompanyhasapproved the project with initial outflows of $6,000,000 anda net present value of $1,200,000.The implementation phase has been commenced with 25% of the costs already committed.However whenthe ground was opened, an underground waterway was revealedwhich will need to be diverted if the project is to proceed. Work to carry out this diversion has been estimated at $1,300,000.Which of the following factors will define whether the project should go ahead or not?