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New CIPS L5M5 Test Braindumps - Reliable L5M5 Exam Simulations
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CIPS Managing Ethical Procurement and Supply (L5M5) Sample Questions (Q25-Q30):NEW QUESTION # 25
Charlie is 13 years old and sometimes helps his parents in their corner shop on weekends, while attending school during the week. Is this an example of child labour?
- A. Yes - Charlie should report his parents to the police
- B. No - Charlie is old enough not to be a child
- C. No - helping in a family business does not count as child labour
- D. Yes - any work by under 16s is child labour
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The ILO defines child labour as work that deprives children of their childhood, education, or well-being. According to the L5M5 study guide (p.252), light work, such as assisting in a family business outside school hours, is not considered child labour if it does not interfere with education or harm physical and mental health. Charlie is attending school, completing homework, and only helping part-time in a family-owned shop. Therefore, this is not classified as child labour. The ILO guidelines make clear distinctions between exploitative labour (such as sweatshops or hazardous industries) and permissible family assistance.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.252
NEW QUESTION # 26
Which of the following best demonstrates how implementing ISO standards can result in direct cost savings?
- A. Gaining new customers by showcasing compliance with international standards
- B. Cloud-based document management systems for paperless operations
- C. Artificial intelligence for predictive customer behavior analysis
- D. Enhancing brand image and reputation in the global market
Answer: B
Explanation:
Option D- This is the correct answer, as cloud-based document storage systems reduce paper, printing, and storage costs. ISO standards often encourage sustainable practices like digitizing documents, which directly saves on operational costs related to printing and paper use.
Incorrect answer:
Option A- While AI can improve business efficiency and decision-making, it is more focused on optimizing customer engagement and marketing strategies. It does not directly lead to cost savings.
Option B- Improving brand image is a long-term strategic benefit but does not directly reduce costs. It may contribute to business growth but not immediate cost savings.
Option C- ISO certification can attract new customers and boost business credibility, but this is more about increasing revenue rather than reducing costs.
Reference:
LO-3.2; Page 277-278; The benefits and challenges of independent standards in securing ESG objectives in ethical and sustainable procurement and supply arrangements
NEW QUESTION # 27
XYZ Corp is seeking industry certification and has hired an external firm to assess its compliance with regulatory requirements and industry standards. The firm will provide an unbiased evaluation and recommend improvements. What type of audit is XYZ Corp conducting?
- A. Internal audit
- B. Compliance audit
- C. Third-party audit
- D. Financial audit
Answer: C
Explanation:
Choice B- While the audit focuses on compliance (option C), the key detail in the scenario is that the audit is being conducted by an external firm. This makes it a third-party audit. A compliance audit (option C) could be conducted either internally or externally, depending on the organization's approach.
Incorrect answer:
Choice A- Internal audits are conducted by the organization's own employees or an internal audit team to assess compliance, risks, and processes. Since XYZ Corp hired an external firm, this is not an internal audit.
Choice C- Although the audit involves assessing compliance with regulatory and industry standards, the key point in the scenario is the use of an external firm. This makes it a third-party audit. A compliance audit can be conducted internally, externally, or by a third party. Incorrect (in this context) Choice D- A financial audit focuses on verifying the accuracy of an organization's financial statements and records. The scenario does not mention financial data but instead focuses on regulatory and industry compliance. Therefore, this is not a financial audit.
Reference:
LO-2.3; Page 207-208; Sourcing third parties for auditing services
NEW QUESTION # 28
In an effort to enhance sustainability and ethical business practices, four companies have embedded Environmental, Social, and Governance (ESG) performance measures into their supplier agreements. Each organization has identified specific ESG challenges and established contractual requirements that suppliers must meet to align with corporate sustainability objectives.
Below is an overview of the ESG priorities for each company and the corresponding contractual terms:
Company 1:
This company has pledged to cut its carbon footprint by 40% by 2030. To achieve this target, it mandates that its suppliers actively contribute to emission reduction efforts. Suppliers are required to meet defined, measurable benchmarks related to carbon emissions and submit periodic reports detailing their progress on sustainability initiatives.
Company 2:
With a strong emphasis on fostering fairness and inclusivity, this company requires suppliers to align their payment structures and financial strategies with its commitment to equity. Suppliers must implement fair compensation policies, ensure timely salary disbursements via banking channels, and adopt ethical pricing structures that support inclusive hiring practices, particularly for underrepresented groups.
Company 3
Operating in industries prone to unethical practices, this company enforces stringent anti-corruption policies and financial transparency requirements for its suppliers. Suppliers must uphold rigorous governance standards, establish transparent reporting mechanisms, and comply with all anti-corruption regulations to ensure ethical business operations.
Company 4
This company is committed to making a meaningful impact on the communities in which its suppliers operate. As part of its contractual obligations, suppliers must actively participate in local initiatives that drive social and economic development. This includes contributing to community projects, generating employment opportunities, and supporting social welfare programs.
The four companies must establish contractual terms aligned with their respective ESG considerations, including a Community Benefit Clause, Key Performance Indicators (KPIs), Commercial Clause, and Governance Clause.
Match Column A with Column B from the following table:

- A. Equality, Diversity, and Inclusion (EDI): Commercial Clause
- B. Carbon Emissions: KPI as Performance Measure
Answer: A,B
Explanation:

Company 1: Carbon Emissions + KPI as a Performance Measure To achieve its goal of reducing carbon emissions, the company mandates that suppliers meet specific sustainability targets. By incorporating Key Performance Indicators (KPIs) into contracts, progress becomes measurable, ensuring accountability and continuous improvement in environmental performance. Company 2: Equality, Diversity, and Inclusion (EDI) + Commercial Clause The company's commitment to inclusivity is reinforced through a Commercial Clause, requiring suppliers to align financial practices with ethical standards. This includes fair payment structures, equitable pricing models, and hiring policies that support underrepresented groups, ensuring diversity and inclusion within the supply chain. Company 3: Governance + Governance Clause Operating in a high-risk industry, the company prioritizes governance and transparency by enforcing strict anti-corruption policies. The Governance Clause mandates adherence to ethical business practices, requiring suppliers to implement robust compliance frameworks, transparent financial reporting, and regulatory alignment. Company 4: Social Value + Community Benefit Clause The company's dedication to creating positive community impact is embedded within a Community Benefit Clause. This contractual requirement ensures that suppliers actively contribute to local social and economic development, participate in community projects, and provide employment opportunities, fostering long-term sustainability in the regions they operate.
NEW QUESTION # 29
Which term describes non-binding recommendations that offer guidance on best practices?
- A. Directives
- B. Regulations
- C. Guidelines
- D. Statutes
Answer: C
Explanation:
Choice A- These are non-binding recommendations or advice that suggest best practices but do not carry the force of law. This A is the correct choice.
Incorrect answer:
Choice B- These are binding legal rules that must be followed as they have the force of law. They come into force on a set date in all of the member states.
Choice C- In legal contexts (e.g., EU), directives set goals that member states must achieve, but each state decides how to implement them.
Choice D- These are formal written laws passed by a legislative body of a government, and they are legally binding.
Reference:
LO-2.2; Page 185; Monitoring Contract Performance
NEW QUESTION # 30
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