CIMA E1 – Managing Finance in a Digital World
CIMA E1 – MANAGING FINANCE IN A DIGITAL WORLD |
VERIFIED EXAM QUESTIONS AND ANSWERS - LATEST
VERSION 2026/2027
1. Under the CIMA 'Information to Impact' framework, what is the
correct sequence of activities performed by the finance function?
A. Insight, data, information, influence, impact
B. Data, information, insight, influence, impact
C. Information, data, impact, insight, influence
D. Impact, influence, insight, information, data
ANSWER : B. Data, information, insight, influence, impact — The
framework moves finance from raw data through information and insight
to influencing decisions and delivering impact.
2. Which of the following best describes the modern role of the finance
function in a digitally-enabled organisation?
A. A cost centre with no involvement in strategic planning
B. A back-office function whose sole purpose is transaction processing
C. A value-adding business partner that supports strategic decision-
making across the organisation
D. A department that exists only to satisfy external audit requirements
ANSWER : C. A value-adding business partner that supports strategic
decision-making across the organisation — Digital transformation has
shifted finance from transactional processing toward strategic business
partnering.
3. Which term describes finance staff who work closely with
operational managers to provide analysis and challenge decisions?
A. Internal auditors
B. Business partners
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, CIMA E1 – Managing Finance in a Digital World
C. Statutory reporters
D. Transaction processors
ANSWER : B. Business partners — Business partnering involves finance
professionals embedding with operations to add insight and challenge.
4. In the finance function, 'stewardship' primarily refers to which
activity?
A. Negotiating supplier contracts
B. Recruiting new finance staff
C. Designing new marketing campaigns
D. Safeguarding assets and ensuring accurate financial reporting
ANSWER : D. Safeguarding assets and ensuring accurate financial
reporting — Stewardship is the traditional role of protecting assets and
ensuring reliable financial records.
5. Which of the following is an example of finance adding 'insight'
rather than simply reporting 'information'?
A. Producing a spreadsheet listing monthly sales by region
B. Filing a VAT return
C. Reconciling the bank statement
D. Explaining why a cost variance occurred and its likely future impact
ANSWER : D. Explaining why a cost variance occurred and its likely
future impact — Insight goes beyond raw figures to explain causes and
implications, supporting decisions.
6. Which activity would be classed as 'transactional' finance work
rather than 'value-adding' work?
A. Presenting strategic risk analysis to senior management
B. Building a forecasting model for new product launches
C. Processing supplier invoices for payment
D. Advising the board on a proposed acquisition
ANSWER : C. Processing supplier invoices for payment —
Transactional work covers routine processing activities such as invoice
payment, distinct from strategic advisory work.
7. What is a key benefit of automating routine transactional finance
activities?
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, CIMA E1 – Managing Finance in a Digital World
A. It frees finance professionals to focus on analysis and business
partnering
B. It eliminates the need for any financial controls
C. It removes the requirement for management accounts
D. It guarantees regulatory compliance without human review
ANSWER : A. It frees finance professionals to focus on analysis and
business partnering — Automation reduces time spent on routine tasks,
allowing finance staff to focus on higher-value analytical work.
8. Which of the following best defines 'management accounting' as
distinct from 'financial accounting'?
A. Providing information to internal managers to support planning,
control and decision-making
B. Preparing statutory accounts solely for external shareholders
C. Ensuring compliance with international financial reporting standards
only
D. Auditing the financial statements of the organisation
ANSWER : A. Providing information to internal managers to support
planning, control and decision-making — Management accounting is
internally focused on decision support, unlike financial accounting's
external reporting focus.
9. Why might finance professionals need a broader skill set in a digital
world?
A. Because organisations no longer need budgets
B. Because accounting standards no longer apply
C. Because external auditors now perform all analysis
D. Because technology now performs much of the routine data processing,
requiring finance to focus on interpretation and communication skills
ANSWER : D. Because technology now performs much of the routine
data processing, requiring finance to focus on interpretation and
communication skills — As automation handles routine processing,
finance professionals need stronger analytical, digital and communication
skills.
10. Which of the following is NOT typically considered one of the core
roles of the finance function?
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, CIMA E1 – Managing Finance in a Digital World
A. Setting the organisation's overall marketing strategy independently of
other functions
B. Financial reporting and stewardship
C. Risk management and internal control
D. Performance management and business partnering
ANSWER : A. Setting the organisation's overall marketing strategy
independently of other functions — Marketing strategy is not a core
finance role, though finance supports other functions including marketing
with analysis.
ETHICS AND PROFESSIONAL CONDUCT
11. How many fundamental principles are set out in the CIMA/IFAC
Code of Ethics for Professional Accountants?
A. Five
B. Seven
C. Four
D. Three
ANSWER : A. Five — The Code sets out five fundamental principles:
integrity, objectivity, professional competence and due care, confidentiality,
and professional behaviour.
12. Which fundamental principle requires a professional accountant to
be straightforward and honest in all professional relationships?
A. Confidentiality
B. Professional behaviour
C. Objectivity
D. Integrity
ANSWER : D. Integrity — Integrity requires honesty and
straightforwardness in all professional and business relationships.
13. The principle of 'objectivity' requires a professional accountant to
avoid which of the following?
A. Allowing bias, conflict of interest or undue influence to override
professional judgement
B. Keeping client information confidential
C. Complying with relevant laws and regulations
D. Maintaining professional knowledge and skill
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CIMA E1 – MANAGING FINANCE IN A DIGITAL WORLD |
VERIFIED EXAM QUESTIONS AND ANSWERS - LATEST
VERSION 2026/2027
1. Under the CIMA 'Information to Impact' framework, what is the
correct sequence of activities performed by the finance function?
A. Insight, data, information, influence, impact
B. Data, information, insight, influence, impact
C. Information, data, impact, insight, influence
D. Impact, influence, insight, information, data
ANSWER : B. Data, information, insight, influence, impact — The
framework moves finance from raw data through information and insight
to influencing decisions and delivering impact.
2. Which of the following best describes the modern role of the finance
function in a digitally-enabled organisation?
A. A cost centre with no involvement in strategic planning
B. A back-office function whose sole purpose is transaction processing
C. A value-adding business partner that supports strategic decision-
making across the organisation
D. A department that exists only to satisfy external audit requirements
ANSWER : C. A value-adding business partner that supports strategic
decision-making across the organisation — Digital transformation has
shifted finance from transactional processing toward strategic business
partnering.
3. Which term describes finance staff who work closely with
operational managers to provide analysis and challenge decisions?
A. Internal auditors
B. Business partners
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, CIMA E1 – Managing Finance in a Digital World
C. Statutory reporters
D. Transaction processors
ANSWER : B. Business partners — Business partnering involves finance
professionals embedding with operations to add insight and challenge.
4. In the finance function, 'stewardship' primarily refers to which
activity?
A. Negotiating supplier contracts
B. Recruiting new finance staff
C. Designing new marketing campaigns
D. Safeguarding assets and ensuring accurate financial reporting
ANSWER : D. Safeguarding assets and ensuring accurate financial
reporting — Stewardship is the traditional role of protecting assets and
ensuring reliable financial records.
5. Which of the following is an example of finance adding 'insight'
rather than simply reporting 'information'?
A. Producing a spreadsheet listing monthly sales by region
B. Filing a VAT return
C. Reconciling the bank statement
D. Explaining why a cost variance occurred and its likely future impact
ANSWER : D. Explaining why a cost variance occurred and its likely
future impact — Insight goes beyond raw figures to explain causes and
implications, supporting decisions.
6. Which activity would be classed as 'transactional' finance work
rather than 'value-adding' work?
A. Presenting strategic risk analysis to senior management
B. Building a forecasting model for new product launches
C. Processing supplier invoices for payment
D. Advising the board on a proposed acquisition
ANSWER : C. Processing supplier invoices for payment —
Transactional work covers routine processing activities such as invoice
payment, distinct from strategic advisory work.
7. What is a key benefit of automating routine transactional finance
activities?
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, CIMA E1 – Managing Finance in a Digital World
A. It frees finance professionals to focus on analysis and business
partnering
B. It eliminates the need for any financial controls
C. It removes the requirement for management accounts
D. It guarantees regulatory compliance without human review
ANSWER : A. It frees finance professionals to focus on analysis and
business partnering — Automation reduces time spent on routine tasks,
allowing finance staff to focus on higher-value analytical work.
8. Which of the following best defines 'management accounting' as
distinct from 'financial accounting'?
A. Providing information to internal managers to support planning,
control and decision-making
B. Preparing statutory accounts solely for external shareholders
C. Ensuring compliance with international financial reporting standards
only
D. Auditing the financial statements of the organisation
ANSWER : A. Providing information to internal managers to support
planning, control and decision-making — Management accounting is
internally focused on decision support, unlike financial accounting's
external reporting focus.
9. Why might finance professionals need a broader skill set in a digital
world?
A. Because organisations no longer need budgets
B. Because accounting standards no longer apply
C. Because external auditors now perform all analysis
D. Because technology now performs much of the routine data processing,
requiring finance to focus on interpretation and communication skills
ANSWER : D. Because technology now performs much of the routine
data processing, requiring finance to focus on interpretation and
communication skills — As automation handles routine processing,
finance professionals need stronger analytical, digital and communication
skills.
10. Which of the following is NOT typically considered one of the core
roles of the finance function?
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, CIMA E1 – Managing Finance in a Digital World
A. Setting the organisation's overall marketing strategy independently of
other functions
B. Financial reporting and stewardship
C. Risk management and internal control
D. Performance management and business partnering
ANSWER : A. Setting the organisation's overall marketing strategy
independently of other functions — Marketing strategy is not a core
finance role, though finance supports other functions including marketing
with analysis.
ETHICS AND PROFESSIONAL CONDUCT
11. How many fundamental principles are set out in the CIMA/IFAC
Code of Ethics for Professional Accountants?
A. Five
B. Seven
C. Four
D. Three
ANSWER : A. Five — The Code sets out five fundamental principles:
integrity, objectivity, professional competence and due care, confidentiality,
and professional behaviour.
12. Which fundamental principle requires a professional accountant to
be straightforward and honest in all professional relationships?
A. Confidentiality
B. Professional behaviour
C. Objectivity
D. Integrity
ANSWER : D. Integrity — Integrity requires honesty and
straightforwardness in all professional and business relationships.
13. The principle of 'objectivity' requires a professional accountant to
avoid which of the following?
A. Allowing bias, conflict of interest or undue influence to override
professional judgement
B. Keeping client information confidential
C. Complying with relevant laws and regulations
D. Maintaining professional knowledge and skill
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