CIPS Updated L5M5 Exam Questions and Answers by celine

Child labour often occurs in the production stage (e.g., farming, mining) and manufacturing stage (e.g., garment sweatshops). According to the L5M5 study guide (p.252), these unethical practices create risks for procurement, as organisations may face reputational damage, legal consequences, and disrupted supply chains. Retailers and suppliers are indirectly affected but are not the primary locations where child labour is found. Procurement professionals must ensure thorough supply chain due diligence, audits, and supplier codes of conduct to prevent child labour risks in procurement decisions.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.252

The International Labour Organisation (ILO) has defined core labour standards. According to the L5M5 study guide (old p.60, new p.88), these include freedom of association (A) and payment of a living wage (B). Other standards include the right to unionise, elimination of forced labour, and restriction of child labour. Equal opportunities (C) and protection from job insecurity (D) are important labour rights but not classified as core ILO standards. Procurement professionals must ensure suppliers comply with these standards to avoid reputational, legal, and operational risks.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.88

Procurement often considers Whole Life Cycle Costing (WLCC) rather than upfront cost alone. The L5M5 study guide (p.7) explains that while a product may be more expensive initially, it may be cheaper in the long term due to lower maintenance costs, greater durability, and reduced energy use. This approach supports sustainability by balancing financial and environmental impacts. Options A, B, and D cannot be assumed from the scenario since no evidence supports them. WLCC ensures procurement delivers long-term value, aligning with sustainability goals.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.7

Fraud risks in procurement typically include practices such as bid rigging (collusion to manipulate tenders), phantom suppliers (fake companies created to siphon money), and deliberate duplicate payments (processing false or repeated invoices). However, accepting presents is classified as bribery, not fraud. The L5M5 study guide (old p.139, new p.50) explains that fraud involves intentional deception for personal gain, while bribery relates to improper inducements or gifts. Procurement professionals must distinguish between fraud and bribery because both undermine ethical procurement but require different controls. For example, fraud prevention requires audit trails and segregation of duties, while anti-bribery policies require clear rules on gifts and hospitality.

???? Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, old p.139, new p.50