Question 1

Which of the following are reasons why a global organisation opts to use transfer pricing arrangements? Select TWO that apply:

Options :

A : Improving local economy

B : No risk of tax evasion

C : Leveraging local sourcing better

D : Simply internal accounting procedure

E : Reduction in international tax expense

Answer: A,D

Question 2

A procurement manager of a medium-sized company has suggested to their executive board that implementing an ISO environmental standard would improve procurement practices and reduce environmental and social impacts. However, some colleagues are concerned about the potential complexity and supplier resistance. Should the company go ahead with the recommendation?

Options :

A : Yes, as it would align with, and help to achieve, sustainability goals

B : No, ISO standards are too complex for staff and suppliers to understand and follow

C : No, because ISO standards are only relevant to large organisations

D : Yes, implementation would guarantee that the company is compliant with all environmental laws

Answer: A

Question 3

Which of the following are signs that modern-day slavery might be taking place within the supply chain? Select THREE.

Options :

A : suspiciously low labour costs

B : poor quality products

C : workers that live on-site

D : suppliers who speak English as a second language

E : supplier based in a country with a low score on the Corruption Perception Index

Answer: A,B,C

Question 4

Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?

Options :

A :

The buyer must ensure continuity of supply because financial problems of a supplier could affect the supply

B :

Financial assessments provide a holistic view of a company's capability, including quality and delivery performance

C : A supplier who is highly profitable will be charging prices higher than the average market rate

D :

If a supplier has a high credit score, this means it pays its own suppliers late, which could result in stock outs

Answer: A

Question 5

Which of the following is considered as part of ESG?

Options :

A : bribery, corruption and the environment

B : market conditions and product lifecycle

C : liquidity, gearing and profitability

D : economic and social governance

Answer: B