CIPS L4M1 LO3 UPDATED ACTUAL
Exam Questions and CORRECT Answers
Corporate governance - CORRECT ANSWER - The system of standards, procedures and
policies by which an organisation is controlled
-framework created around a businesses aims and objectives
-makes organisations effective, efficient and successful
-ensures all procedures are ethical
-aim is to direct and control the actions of stakeholders
Importance of corporate governance - CORRECT ANSWER - -helps mitigate risk
-promote accountability
-build trust and confidence with stakeholders
-ethical practice only
-keep stakeholders in line
-can prevent corporate fraud (ie ordering and paying for something different to that stated on the
PO)
-reduce corruption
-reduce forms of misconduct
-provides foundations for responsible and sustainable procurement practices
-leads to better VFM, supplier relationships and increased stakeholder confidence
Documented policies and procedures - CORRECT ANSWER - -provides a clear
framework for all parties involved
-establish guidelines for decision-making
-can be used as a ref for Trianon grooms / new members
-help monitor & evaluate the effectiveness of Proc activities
,Policies - CORRECT ANSWER - Can be based on a range of things such as objectives,
legislation, regulation and standards
Procedure - CORRECT ANSWER - Defines how the policy will be carried out of
delivered
Documented policies and procedures: Legal and regulatory requirements - CORRECT
ANSWER - -helps organisations comply
-outlines rules which must be followed (incl Proc methods and documentation)
-ensure practices are transparent and fair , reducing the risk on legal issues
Documented policies and procedures: consistency and efficiency - CORRECT ANSWER -
-especially important for organisations with multiple locations or departments where Proc
activities may vary
-ensures everyone follows the same process
-can result in cost saving and reduce the admin burden
Documented policies and procedures: reference points - CORRECT ANSWER - -can be
referred to, to understand how the Proc process works, what they are responsible for and what
their rights and obligations are
Documented policies and procedures: mitigate risk - CORRECT ANSWER - -included
provisions for risk management such as supplier vetting, due diligence, contract negotiation and
dispute resolution
-can reduce risk of fraud and errors
Organisational accountability & reporting - CORRECT ANSWER - -enables organisations
to track and monitor Proc activities
-ensures they are operating in a transparent and responsible manner
-organisations that prioritise this are better positioned to build trust with stakeholders, protect the
organisations reputation and achieve strategic goals
, Organisational accountability & reporting: accountability - CORRECT ANSWER --
organisation / stakeholders held accountable for their actions and decisions
Organisational accountability & reporting: reporting - CORRECT ANSWER - - providing
information about Proc activities to stakeholders E.g. senior managers
-enables stakeholders to assess the effectiveness of Proc activities and to hold the Proc
department accountable for its actions
Organisational accountability & reporting importance: ethics and transparency - CORRECT
ANSWER - - important because Proc activities can have significant impact on an
organisations reputation and financial performance
-can help to build trust with stakeholders and protect the organisations reputation
Organisational accountability & reporting importance: efficiency and effectiveness - CORRECT
ANSWER - - by tracking and monitoring proc activities, organisations can identify areas
where processes can be streamlined and costs reduced
-can provide valuable insights into supplier performance
-can help to negotiate better contracts and improve relationships
Organisational accountability & reporting importance: ensure compliance with regulatory
requirements - CORRECT ANSWER - -subject to a range of legal and regulatory
requirements: anti-bribery, competition, social responsibility
-regular reports to regulators can reduce the risk of legal and financial penalties
Acting with integrity - CORRECT ANSWER - -Proc are responsible for making
purchasing decisions that are cost-effective and provide VFM
-must always act with integrity to:
>avoid conflict of interest
>compliance with laws and regulations
>protecting reputation
Exam Questions and CORRECT Answers
Corporate governance - CORRECT ANSWER - The system of standards, procedures and
policies by which an organisation is controlled
-framework created around a businesses aims and objectives
-makes organisations effective, efficient and successful
-ensures all procedures are ethical
-aim is to direct and control the actions of stakeholders
Importance of corporate governance - CORRECT ANSWER - -helps mitigate risk
-promote accountability
-build trust and confidence with stakeholders
-ethical practice only
-keep stakeholders in line
-can prevent corporate fraud (ie ordering and paying for something different to that stated on the
PO)
-reduce corruption
-reduce forms of misconduct
-provides foundations for responsible and sustainable procurement practices
-leads to better VFM, supplier relationships and increased stakeholder confidence
Documented policies and procedures - CORRECT ANSWER - -provides a clear
framework for all parties involved
-establish guidelines for decision-making
-can be used as a ref for Trianon grooms / new members
-help monitor & evaluate the effectiveness of Proc activities
,Policies - CORRECT ANSWER - Can be based on a range of things such as objectives,
legislation, regulation and standards
Procedure - CORRECT ANSWER - Defines how the policy will be carried out of
delivered
Documented policies and procedures: Legal and regulatory requirements - CORRECT
ANSWER - -helps organisations comply
-outlines rules which must be followed (incl Proc methods and documentation)
-ensure practices are transparent and fair , reducing the risk on legal issues
Documented policies and procedures: consistency and efficiency - CORRECT ANSWER -
-especially important for organisations with multiple locations or departments where Proc
activities may vary
-ensures everyone follows the same process
-can result in cost saving and reduce the admin burden
Documented policies and procedures: reference points - CORRECT ANSWER - -can be
referred to, to understand how the Proc process works, what they are responsible for and what
their rights and obligations are
Documented policies and procedures: mitigate risk - CORRECT ANSWER - -included
provisions for risk management such as supplier vetting, due diligence, contract negotiation and
dispute resolution
-can reduce risk of fraud and errors
Organisational accountability & reporting - CORRECT ANSWER - -enables organisations
to track and monitor Proc activities
-ensures they are operating in a transparent and responsible manner
-organisations that prioritise this are better positioned to build trust with stakeholders, protect the
organisations reputation and achieve strategic goals
, Organisational accountability & reporting: accountability - CORRECT ANSWER --
organisation / stakeholders held accountable for their actions and decisions
Organisational accountability & reporting: reporting - CORRECT ANSWER - - providing
information about Proc activities to stakeholders E.g. senior managers
-enables stakeholders to assess the effectiveness of Proc activities and to hold the Proc
department accountable for its actions
Organisational accountability & reporting importance: ethics and transparency - CORRECT
ANSWER - - important because Proc activities can have significant impact on an
organisations reputation and financial performance
-can help to build trust with stakeholders and protect the organisations reputation
Organisational accountability & reporting importance: efficiency and effectiveness - CORRECT
ANSWER - - by tracking and monitoring proc activities, organisations can identify areas
where processes can be streamlined and costs reduced
-can provide valuable insights into supplier performance
-can help to negotiate better contracts and improve relationships
Organisational accountability & reporting importance: ensure compliance with regulatory
requirements - CORRECT ANSWER - -subject to a range of legal and regulatory
requirements: anti-bribery, competition, social responsibility
-regular reports to regulators can reduce the risk of legal and financial penalties
Acting with integrity - CORRECT ANSWER - -Proc are responsible for making
purchasing decisions that are cost-effective and provide VFM
-must always act with integrity to:
>avoid conflict of interest
>compliance with laws and regulations
>protecting reputation
