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Free PDF Quiz CIMAPRO19-CS3-1 - Valid Strategic Case Study Exam Regualer Update
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CIMA Strategic Case Study Exam Sample Questions (Q19-Q24):
NEW QUESTION # 19
You have received the following email from Peter Sorchi, CEO:
From: Peter Sorchi, Chief Executive Officer
To: Senior Finance Manager
Fwd: Tax avoidance article
Hi,
I am forwarding you an email from a journalist. It came in via our press office, who passed it up the management chain and it ended up in my inbox.
Some of the basic facts stated in the draft article are correct:
* We do have arrangements in place with leading tax advisers for referrals of potential clients. We pay a commission for all such referrals, which the tax adviser is required to disclose to the client.
* Barry Crauder has been one of our largest clients for many years. He owns significant forested land and we manage that in return for our usual fee.
* We do not offer tax advice, or promote forestry as a tax-efficient investment. We simply offer a forestry management service as a paid service.
I would like you to address the following issues and I need your reply as a matter of some urgency.
Could we be accused of behaving unethically with respect to this aspect of our forestry management service?
Please draft a response that we can submit to Sonia Jones. Please also give an explanation for the Board as to how you will address the fact that the draft newspaper article clearly makes us appear to be unethical. We will consider your draft and related comments at a meeting this afternoon, before submitting anything.
Peter
To: Press Office, Wodd
From: Sonia Jones, reporter, Daily Gazette
Re: Tax avoidance article
I am seeking a response from Wodd concerning the activities of the celebrity Barry Crauder. We have established that Mr Crauder has been investing heavily in forestry in order to avoid paying tax on the considerable wealth that he has amassed from his show business career.
We believe that a significant part of this story is the relationship between forestry companies such as Wodd and professional tax advisers. When researching this story I posed as a wealthy investor and approached several firms that specialise in offering tax avoidance advice to high net worth individuals. Four of the firms whom I approached recommended a forestry scheme and specifically recommended Wodd to manage it for me. I believe that Wodd has a close relationship with these firms and possibly others.
I have attached a draft of my story. I have sufficient evidence to support every fact stated. I am writing in order to give Wodd the opportunity to respond if it wishes to do so, although the story will run regardless. I will require your comment within 48 hours, otherwise, I will run the story as it stands.
Sonia Jones
Chief reporter, Daily Gazette
Answer:
Explanation:
Complete your answer and submit
NEW QUESTION # 20
The following email has been forwarded to you by William Seaton, Director of Finance:
From: William Seaton, Director of Finance
To: Finance Manager
Subject: Email from CFO of Fouce Oil
Hi
This email arrived last night. I need you to help me to think through the various implications of doing what it suggests before I present it to the Board. I need you to focus on the following issues:
* Would this proposal make sense from a strategic point of view?
* If we did decide to go ahead, what would be the issues that we would have to consider with respect to informing the stock market?
Could you please email me your thoughts within the next hour? I have to brief the Board later today.
Thanks
William
The email referred to can be found by clicking on the Reference Materials button.
Answer:
Explanation:
Complete your answer and submit
NEW QUESTION # 21
Reference Material:
You have received the following email from Marcus Svenson, Finance Director:
From: Marcus Svenson, Finance Director
To: Senior Finance Manager
FW: Pricing
Hi,
I am forwarding an email from Sarah Johns.
Sarah has not been with us for very long and this is her first experience of dealing with a currency price movement.
I am really busy, so I need you to respond to her requests. Please email her as soon as possible.
Marcus
From: Sarah Johns, Marketing Director
To: Marcus Svenson, Finance Director
Subject: USD movement
Hi Marcus,
A lot of our biggest customers are threatening to cancel orders unless we reduce our selling prices. Timber and associated products are commodity items that are priced in USD, so I thought that our prices would automatically remain competitive regardless of what happened to the USD. I am particularly confused over domestic sales, because many of the customers who have threatened to cancel are based in this country and we invoice them in M$.
Please help me to understand why the M$/USD exchange rate can affect our competitive position in this way.
I also wish to know why you have chosen to do nothing to hedge against this risk. If you look at the attached article you will see that the USD is an issue in the business news.
Sarah
Answer:
Explanation:
Complete your answer and submit
NEW QUESTION # 22
Newsweb
Wodd and Darrell announce plans for restructuring
True to form, the ink was barely dry on the last contract before the corporate restructuring experts arrived to "counsel out" the staff who have become "surplus to requirements". Wodd and Darrell have still to agree on a new name for their merged entity, but they have already announced the need for "efficiency savings". The first redundancy notices have already been issued and many more are expected to follow over the next few weeks.
Answer:
Explanation:
Complete your answer and submit
NEW QUESTION # 23
Six months have passed since you briefed William Seaton, Director of Finance on the relationship between Slide and Fouce Oil.
You have been called into William Seaton's office:
"We had a visit from the Chief Executive Officer of Fouce Oil yesterday. We had not received any prior notice of the purpose of the visit and assumed that he simply wished to make a courtesy call while he was visiting Fouce Oil's subsidiary in this country. Instead, he came to initiate discussions over a strategy of collaboration on oil exploration.
Rather than explain things myself, please read the memorandum of understanding that he has asked us to sign. It is self-explanatory.
Once you have read the memorandum, I would like you to email me your thoughts on the following:
* The suitability of this proposal for Slide.
* The likelihood that Fouce Oil's strategic interests will clash with our own.
* The strategic risks that are likely to arise because of this arrangement.
* The manner in which this strategic relationship should be communicated to the stock market.
I realise that this is a challenging request, but I need your response quickly because we need to respond to Fouce Oil." The Memorandum of Understanding can be found by clicking on the Reference Materials button.
Answer:
Explanation:
Complete your answer and submit
NEW QUESTION # 24
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