CIPS Exam L4M8 Topic 1 Question 50 Discussion

Actual exam question for CIPS's L4M8 exam

Question #: 50
Topic #: 1

Describe three types of fraud that could occur within the supply chain of an organization with which you are familiar.

AExplanation:
Fraud occurs when a person acts deliberately to secure monies from another party through dishonest method. Within the supply chain of an organization, fraud can represent itself in the following ways:
1. Kickbacks: e.g. (commission given to a bribe taker for service perform)
2. Corrupt influence (e.g ordering more than what is required)
3. Collusion: (group of suppliers working together to submit multiple bids and split profit.
4. Bid Rigging (a contract is informally agreed with a chosen supplier prior to the official process
5. invoicing fraud
6. Substitution (submitting products that are below the required quality
7. False claims (files false document)
Case Study
A series of news stories reporting events such as the collapse of the Rana Plaza building in 2013 have drawn attention to the poor conditions in garment factories across India and South East Asi
a. Human rights groups have long be critical of the excessive hours and poor wages workers are forced to endure, as well as the abuse they receive from supervisor. With consumers becoming increasingly aware of these conditions, more pressure is being put on global brands and retailers to ensure their supply chains are fair and ethical.
Certain areas have been notorious for the mistreatment of workers. In India's textile valley', young women are been bound into contracts where they work for two to three years, in exchange for a lump sum of money that they can then put towards a dowry. This is known as the 'Sumangali [a married woman] Thittam' scheme. These women are forced to live in hostels under restrictions that prevent them from moving, and are denied the opportunity to improve their living conditions. Retailers including Walmart and H&M are known to source garments from factories in the 'textile valley'.
Reports by organizations including the Asia Floor Wage Alliance (AFWA), Central Combodia, Global Labor Justice, Sedane Labour Resource Centre (LIPS) Indonesia, and Society for Labour and Development (SLD) India have exposed unethically run factories that supply garments to H&M, Gap and Walmart. However, retailers will continue to benefit from expensive labour until mounting customers pressure causes them to change.

Show Suggested Answer

Suggested Answer: A

by Alonso at Nov 18, 2024, 06:33 PM

Limited Time Offer

25%

Off

Get Premium L4M8 Questions as Interactive Web-Based Practice Test or PDF

Contribute your Thoughts:

Submit Cancel

Rasheeda

8 days ago

Kickbacks and bid rigging are common types of fraud in supply chains.

upvoted 0 times

...

Craig

12 days ago

Substitution is the worst. Imagine getting a lower-quality product than what you ordered - that's a recipe for disaster. Might as well just buy from the dollar store!

upvoted 0 times

Mignon

5 days ago

User 1

upvoted 0 times

...

Albina

20 days ago

Invoicing fraud and false claims are just sneaky ways for suppliers to rip off the organization. They must think we're all idiots or something!

upvoted 0 times

...

Kris

22 days ago

Collusion and bid rigging are also big problems. It's crazy how some suppliers work together to rig the bidding process and split the profits.

upvoted 0 times

Naomi

2 days ago

Yes, collusion and bid rigging can really harm the organization's supply chain.

upvoted 0 times

...

Zachary

24 days ago

I agree, it's important for organizations to be ethical.

upvoted 0 times

...

Sabine

24 days ago

Kickbacks and corrupt influence seem like the most common types of fraud in the supply chain. I've heard stories of suppliers trying to bribe procurement managers to get their products ordered.

upvoted 0 times