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CIPS L5M5 Exam - Topic 1 Question 14 Discussion
Topic #: 1
Which of the following is not a fraud risk in a procurement function?
Comprehensive and Detailed Explanation From Exact Extract of Documents:
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
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