CIMA Exam CIMAPRA19-P03-1 Topic 1 Question 44 Discussion

Actual exam question for CIMA's CIMAPRA19-P03-1 exam

Question #: 44
Topic #: 1

M built a large factory last year and it has just been completed. The initial outflows on this project have a present value of $400 million and the entire project has a net present value of $30 million.

The initial phase of the project caused problems and there was an overspend of $35 million as there was unstable soil. The foundations had to be underpinned with large steel bars to ensure the building would be safe. There was no other suitable site for the project.

Theconstruction could not be abandoned as the site would have hadvery little commercial value.

The Internal Audit department has been asked to carry out a post completion audit. What issues should it concentrate on?

AThe audit should consider the initial survey report when the land was purchased to see if the survey mentioned the unstable soil.

BThe audit should look at documentation to ensure proper procedures were followed at all stages of the project.

CThe audit should consider what lessons could be learned for future projects.

DThe audit should find out who was to blame for the project being over budget.

EThe audit should consider whether it should have built the factory without underpinning and sold it on quickly.

Show Suggested Answer

Suggested Answer: B, C, E

by Lang at May 01, 2024, 08:11 AM

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Maurine

9 days ago

Focusing on documentation and proper procedures is the way to go. That'll help identify any gaps or mistakes that were made during the project.

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Essie

16 days ago

The audit should definitely look at the initial survey report to see if the unstable soil was mentioned. If the survey missed it, that's a big issue that needs to be addressed.

upvoted 0 times