CIPS L4M4 Practice Exams
Last updated on Oct 22,2026- Exam Code: L4M4
- Exam Name: Ethical and Responsible Sourcing
- Certification Provider: CIPS
- Latest update: Oct 22,2026
Amnesty International, Oxfam and CIPS are examples of what type of organisation?
- A . partnerships
- B . limited liability
- C . not-for-profit
- D . public limited companies
When using a ‘credit account’ payment mechanism, when does a supplier receive payment for the goods?
- A . after delivery
- B . in advance of delivery
- C . when they receive the PO
- D . before the order is placed
Why is it important, when awarding high-value contracts, for a buyer to conduct a financial assessment of a supplier?
- 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
Ali is the Category Manager at an airplane manufacturing factory. He works with many different suppliers who provide different components for the planes. The company is investing heavily in Environmental and Social Governance and Ali has been asked by the CEO what the best practice is to ensure ethical behaviour from suppliers.
Ali has suggested completing Audits. Is this the right thing to do?
- A . No- audits will only reveal financial issues not ethical ones
- B . No- Ali should simply ask the supplier’s about their ethical practices
- C . Yes- audits always uncover ethical violations such as modern day slavery
- D . yes – these can be completed without warning which would give Ali an accurate picture of the supplier’s operations
Incoterms describe several aspects and responsibilities of transporting goods when sourcing internationally.
Which of the following is described by Incoterms? Select THREE.
- A . which party arranges insurance
- B . what form of transportation will be used
- C . how much the transportation will cost
- D . who is responsible for making duty and tariff arrangements
- E . how long the transportation will take
Credit rating agencies can assist procurement professionals. Typically, which of the following can be obtained from a credit rating agency report? Select TWO that apply.
- A . Product pricing information
- B . Payment history
- C . Financial stress score
- D . Tender submission pricing
- E . Rebate information
Pierre is constructing a tender for a security contract. As well as cost, he would like to ask the security companies some questions about their health and safety processes and staff qualifications. He has created several questions and weighted these so that they add up to 25.
is this the correct thing to do?
- A . yes- point systems can be weighted any way a buyer choses so long as this is explained in the ITT
- B . yes- 25 is the correct weighting for quality question
- C . no- the weighting should total 10
- D . no- the weighting should total 100
Pre-qualification of suppliers is used to determine if the suppliers meet the basic requirements of the buying organisation.
Which of the following is assessed at the pre-qualification stage?
- A . capacity, capability and pricing structure
- B . pricing structure, ethics and financial stability
- C . financial stability, capacity and capability
- D . capability, culture and pricing schedules
The procurement manager has received the following data from the supplier’s accounts to facilitate the calculation of the supplier’s current ratio:
Current Assets: Stock $200; Debtors $60; Cash $40; Total $300
Short Term Liabilities: Bank overdraft $150
Which calculation will the procurement manager use to find out the current ratio?
- A . 300÷200×150300 ÷ 200 × 150300÷200×150
- B . 300÷150300 ÷ 150300÷150
- C . (300−150)×100(300 – 150) × 100(300−150)×100
- D . (300−200−150)×100(300 – 200 – 150) × 100(300−200−150)×100
Ivan is an investor who is looking to invest in new businesses. He is reviewing several companies and working out what his equity would be.
Which of the following does Ivan need to know to calculate shareholder equity? Select TWO.
- A . net profit
- B . net income
- C . total liabilities
- D . total assets