CIMA Managing Finance in a Digital World - E1 Exam Questions [2026]

QUESTION NO: 1
The development of technical maps of rules and data structures would be part of which level of a data modelling process?

A. Physical B. Conceptual C. Logical D. Visualisation

Correct Answer: C

QUESTION NO: 2
The Statement of Financial Position is NOT normally used to make decisions concerning which of the following?

A. Reserves B. Trade payables C. Material purchases D. Buildings

Correct Answer: C

QUESTION NO: 3
Company T operates a highly automated manufacturing system. It is computer controlled to promote efficiency and effectiveness and is capable of producing a large number of parts in a flexible manner.
The main advantage this brings to Company T is that dedicated output can be produced quickly in response to customer orders so that the organisation can give very high levels of customer service.
Which system of operational capacity is Company T using?

A. Computer Aided Manufacturing B. Flexible Manufacturing System C. Queuing Theory D. Computer Aided Design

Correct Answer: B

QUESTION NO: 4
An effective Corporate Social Responsibility (CSR) strategy can offer which of the following benefits to an organisation.
Select ALL that apply.

A. Lower administration costs B. Lower salary costs C. Strong brand D. Lower expectations of society E. Lower production costs F. Differentiation

Correct Answer: C,E,F

QUESTION NO: 5
Which of the following is a possible disadvantage associated with a matrix structure?

A. Exchange of opinions is facilitated B. Flexibility is encouraged C. Dilution of functional authority D. Customer orientation is emphasised

Correct Answer: C

QUESTION NO: 6
A manufacturing company had major issues with quality standards and as a result received a number of complaints from its customers.
Due to this the company's senior management has considered some new objectives for the business.
Which of the following comply with all requirements of a SMART objective and will help to overcome this issue?
Select ALL that apply.

A. To reduce the number of complaints due to quality issues by 28% by the end of the year. B. To reduce the current level of defects from Oper 1,000 to 35 per 1,000 by the end of the month. C. To increase output from 2,500 units per hour to 3,500 units per hour within a year. D. To reduce quality issues significantly within eight weeks. E. To reduce defects from 53 per 1000 to 35 per 10,000 within 10 months. F. To reduce the number of complaints from 754 to 450 as soon as possible

Correct Answer: A,E

QUESTION NO: 7
The Finance Director has been asked to produce a cost saving plan for the organisation which is to come into effect immediately. His initial suggestion to enable quick savings is to cut the staff development and training budget by 50%. Before he publishes the plan he has asked you to review it and let him know what the effect of this may be in the short term.
Select ALL that apply.

A. Staff skill levels may reduce B. There may be a loss of competitive advantage C. Profit will increase D. Key staff may leave E. Staff motivation may reduce F. Recruitment may be more difficult

Correct Answer: C,E,F

QUESTION NO: 8
The development of a Corporate Digital Responsibility (CDR) strategy is increasingly common in modern business and will include 5 key areas including customer expectation Which of the following best describes customer expectation in this context?

A. Sharing data in a benevolent way to help society, this could help inform choices and improve management of information B. Ensuring all members of society have the skill, tools and ability to access the online digital world C. Using data in a responsible and secure way that is in line with customer and employees expectations. D. The need for transparency around the use of data and the ability to opt in and be rewarded for sharing data

Correct Answer: C

QUESTION NO: 9
A service level agreement will NOT normally include which of the following?

A. The consequences of failing to meet targets B. The number of targets to be used C. The procedure for dealing with complaints D. Details of the mode of operation of the supplier

Correct Answer: D

QUESTION NO: 10
Which of the following will mean a company has breached a General Data Protection Regulation (GDPR) principle'?

A. Data has been used fairly, lawfully and transparently B. Data has been kept securely with restricted access C. Data has been deleted after it is no longer required D. Data has been kept for longer than necessary

Correct Answer: D

QUESTION NO: 11
XBY has recently started making use of big data analytics to assist in producing market predictions It is using software to process large data sets by utilising multiple servers simultaneously.
Which of the following best describes the term for this software?

A. Remote B. Hadoop C. Visualisation D. External

Correct Answer: B

QUESTION NO: 12
General Data Protection Regulation (GDPR) legislation in the EU attempts to ensure that organisations follow certain principles.
Which of the following is contained in these principles?

A. Data can be kept for longer than necessary so long as it is secure. B. Data that is adequate and relevant can be used in any way C. Data must be used lawfully but transparency is not required D. Data must be accurate, and where required, kept up-to-date

Correct Answer: D

QUESTION NO: 13
With the use of increasingly sophisticated systems and improved communications, the focus of the accountant's role has changed in recent years to which of the following?

A. Business support B. Variance reporting C. Treasury management D. Statutory reporting

Correct Answer: A