CIMA Exam CIMAPRA19-P03-1 Topic 4 Question 41 Discussion

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

Question #: 41
Topic #: 4

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.

ADoing so may improve independence.

BDecisions relating to internal audit can be based solely on cost.

CInternal audit will have a better understanding of D plc's objectives and culture.

DSpecialist skills may be more readily available.

ERisk of staff turnover is passed to the outsource company.

Show Suggested Answer

Suggested Answer: C, E

by Virgie at Mar 16, 2024, 08:51 PM

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Stanton

1 months ago

I'm just wondering if the CEO is trying to cut costs so they can have a bigger budget for the company's annual retreat. You know, team-building exercises and all that jazz.

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Lizbeth

1 months ago

Outsourcing internal audit? I hope they don't end up with a bunch of bean-counters who have no idea how to make a good PR move. That would be a PR nightmare!

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Darrin

5 days ago

E) Risk of staff turnover is passed to the outsource company.

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Cyril

6 days ago

A) Doing so may improve independence.

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Justine

1 months ago

What, they're considering outsourcing just to save money? That's a recipe for disaster. Internal auditors need a deep understanding of the company's culture and objectives.

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Deonna

1 months ago

I agree that specialist skills may be more readily available through outsourcing. Plus, the outsource company can handle the risk of staff turnover, which is a bonus.

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Candida

17 days ago

E) Risk of staff turnover is passed to the outsource company.

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Lelia

18 days ago

C) Internal audit will have a better understanding of D plc's objectives and culture.

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Alecia

21 days ago

A) Doing so may improve independence.

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Paz

2 months ago

Outsourcing internal audit could definitely improve independence, as the auditors would be from a separate firm. However, I'm not sure if cost should be the sole factor in the decision.

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Myra

11 hours ago

A) Doing so may improve independence.

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Catarina

15 days ago

Outsourcing internal audit could definitely improve independence, as the auditors would be from a separate firm. However, I'm not sure if cost should be the sole factor in the decision.

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