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CIMAPRO19-CS3-1 Exam Questions
- Topic 1: Strategic Analysis: The Strategic Analysis section provides a basic understanding of how to evaluate both internal and external factors affecting an organization. You will start by examining strategic positioning using tools and frameworks such as PESTEL, SWOT, and Porter’s Five Forces to assess the business environment and the organization’s place within it.
- Topic 2: Strategic Choices: The Strategic Choices section explores the process of making well-informed strategic decisions based on thorough analysis. This includes identifying and assessing various strategic options using methods like cost-benefit analysis and risk assessment to determine the most effective alternatives.
- Topic 3: Strategic Implementation: In the Strategic Implementation section, the emphasis is on converting strategic plans into actionable steps and ensuring their successful execution. You will learn how to define strategic objectives and develop detailed plans to accomplish them. This section includes change management strategies to address organizational changes and overcome resistance, ensuring that strategic initiatives are effectively carried out.
- Topic 4: Strategic Control and Evaluation: The Strategic Control and Evaluation section underscores the significance of monitoring and evaluating the success of strategic plans.
- Topic 5: Governance and Ethics: The Governance and Ethics section deals with the role of governance and ethical considerations in strategic management. It includes an exploration of corporate governance principles and their application to strategic decision-making.
Free CIMA CIMAPRO19-CS3-1 Exam Actual Questions
Note: Premium Questions for CIMAPRO19-CS3-1 were last updated On Nov. 10, 2024 (see below)
SIMULATION
A month later, you receive the following email:
Reference Material:
From: Hesham El-Sayed. Independent Non-executive
Director
To: Romuald Marek. Chief Finance Officer
Subject: Collapse of fuel supplier
Hi Romuald
I am writing to give you some advance notice of an internal audit investigation that has been commissioned by the Audit Committee
Just over a year ago. Planejoos, a newly formed company, approached the management team at Airfield's Capital City International (CCI) airport and offered to take over refueling operations at Starport Planejoos offered a higher percentage of revenue than the existing supplier was paying CCI's management team agreed and appointed Planejoos rather than renew the existing supplier's contract.
CCI was unable to conduct the usual background and credit checks on Planejoos for two reasons. Firstly, Planejoos was a new company and so did not have an extensive credit history that could be checked Secondly CCI was under time pressure to reach a decision on whether to renew the existing supplier's contract or allow it to expire
CCI's management team claimed that it had acted quickly in order to benefit from the additional revenue that could be earned from dealing with Planejoos The management team was acting on the basis that it had an ethical duty to maximise the wealth of Airfield's shareholders and that maximising revenues from fuel sales through this agreement with Planejoos was consistent with that ethical duty.
Unfortunately, as a new company. Planejoos struggled to obtain trade credit and the high demand for fuel put the company's cash flows under extreme pressure Receipts from sales lagged behind payments for inventory Planejoos has now collapsed, leaving a large trade receivable that CCI will have to write off as uncollectable CCI had permitted this receivable to accumulate rather
than pressing for payment and so putting Planejoos under further pressure.
Fortunately, the previous fuel supplier was prepared to return to CCI.
Kind regards
Requirement: 1
The acceptance of Planejoos at Capital City International airport with out credit rating check is a sign of poor internal audit practices. The CCI is the biggest airport the Arrfied owned and amongst the world big airports. The Planejoos is a newer and inexperienced company without sound credit and financial history, the collapse of aviation fuel provider at a major airport is credit and reputaional risk
The internal audit performance laking in Arrfied which is in the aviation business could put the business in danger and needs to be corrected. The poor performance of internal audit by not inusring compliance could make damage i.e. a terrorist could attack the aircraft and landside if properchecking are not done. The aviation business are vulnerable to hijacking, human trafficking and smuggling. A special attention must be invited to internal audit.
The overall performance of the internal audit and audit committee is questionable here. The audit committee is not formulated correctly. No non-executive director have sound financial expertise. Martin Harris is the only NED with financial expertise and taking him out of audit committee is not sign of good corporate governance. The new leadership at the audit committee with savvy of financial knowledge must be on the board.
Martin Harris should be taken on the board in replacement of Carmelita Tante. Revamp the internal audit department and startup a credit department which is also responsible to rating checking.
Arrfield must also think about to formulate a risk committee to check the risk and ensure that the risks are properly managed.
Requirement : 2
It is the duty of the management to maximize the shareholder's wealth, but a proper care must be taken while making any decision on behalf of the shareholders. It seems due care is not given to the decision and the decision was made in haste.
It is not only duty of the management to maximize wealth of the shareholder, they are supposed to protect the wealth of the shareholders. Any decision no taken within the risk appetite of the company may leads to breach of ethical principles.
The shareholders trust on the management that they will make the decisions in best interest of the company even if this is not is their own interest. Incase of the Planejoos the management has neglected the credit rating check any made the decision solely on the basis of prices that Planejoos quoted. It seems that this decision does not fit in the risk appetite and risk tolerance of the Arrfield.
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