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You can acquire a sense of the L4M4 software by downloading a free trial version before deciding whether to buy it. This CIPS L4M4 practice exam software lets you identify your strengths and shortcomings, allowing you to concentrate on those aspects of your Ethical and Responsible Sourcing (L4M4) test preparation that could use some work.

CIPS L4M4 Exam Syllabus Topics:

Topic
Details

Topic 1

This section examines analyzing market data, obtaining quotations
tenders, and assessing responses. The sub-topics focus on key processes for evaluating potential suppliers.

Topic 2

Understand compliance issues when sourcing from suppliers: It explores legislative, regulatory, and organizational requirements for sourcing. It compares the use of audit and other mechanism of feedback.

Topic 3

Understand options for sourcing requirements from suppliers: This section covers the sourcing process, approaches, options, and award criteria for obtaining requirements from suppliers. The sub-topics provide a foundation for strategic sourcing.

Topic 4

Understand the key processes that can be applied to the analysis of potential external suppliers:

CIPS Ethical and Responsible Sourcing Sample Questions (Q260-Q265):

NEW QUESTION # 260
A company has a requirement for an item that has been identified as strategic on the positioning model. The company needs to invite competitive tenders and make sure the selected supplier of this item is in a good financial position. What should the company ask the suppliers to send to show that their current assets cover their current liabilities?

A. Acid test
B. Annual turnover
C. Profit and loss account
D. Gearing ratio

Answer: A

Explanation:
The acid test, also known as the quick ratio, measures a company's ability to cover its current liabilities with its most liquid assets, excluding inventory. It is a stringent indicator of short-term financial health. By requesting this ratio, the company can assess whether a potential supplier has sufficient liquidity to meet its obligations, which is crucial when procuring strategic items.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 2.3: Financial Appraisal of Suppliers

NEW QUESTION # 261
What are the risks of outsourcing?
* Loss of control of a project
* Loss of assets
* Loss of future business opportunities
* Loss of private information

A. 1 and 2 only
B. 2 and 3 only
C. 3 and 4 only
D. 1 and 4 only

Answer: D

Explanation:
Outsourcing can lead to a loss of control over certain aspects of a project, as the organization relies on external parties to deliver services or products. Additionally, sharing sensitive information with third-party vendors increases the risk of data breaches or loss of private information. While there may be concerns about assets or future business opportunities, the primary risks in outsourcingrelate to control and information security.
Reference:
CIPS Level 4 Diploma in Procurement and Supply, L4M4 Study Guide, Section 3.2: Risks Associated with Outsourcing

NEW QUESTION # 262
Procurement professionals should never appoint suppliers with a low credit rating. Is this statement true?

A. Yes, because this rating indicates poor financial management practices
B. No, because a credit rating is not an appropriate decision-making tool
C. Yes, because this rating means insolvency or liquidation is imminent
D. No, because a credit rating is only one financial tool to be used in determining competence

Answer: D

Explanation:
A credit rating is a useful but limited indicator of financial health. It reflects a supplier's likelihood of meeting short-term obligations but may not capture context such as investment stage, government backing, or corrective strategies. Responsible sourcing requires holistic assessments, including liquidity ratios, profitability, gearing, and qualitative factors like market position and management capability. Automatically rejecting suppliers with lower scores can unnecessarily restrict competition or exclude SMEs in emerging markets. Instead, CIPS advocates proportional risk assessment and, where necessary, mitigation measures such as shorter contracts, phased payments, or guarantees.
Reference: CIPS L4M4 Study Guide (v2), LO: "Application" - financial appraisal tools and their limitations.

NEW QUESTION # 263
Foresttors Plc is negotiating a new contract for the procurement of timber, a crucial component of its production operations. The company has incorporated environmental, social, and governance (ESG) reporting requirements into the contractual terms. Is this a valid approach?

A. Yes. This helps to demonstrate the importance of compliance with ESG
B. No. Suppliers cannot be legally responsible for ESG compliance; this should be the buying organisation
C. Yes, providing the contract does not require a supplier to do anything differently for ESG than they have done previously
D. No. ESG is not within the scope of a contractual document and should always be treated informally

Answer: A

Explanation:
Embedding ESG/ethical clauses and reporting in contracts is a key mechanism to implement responsible sourcing, set clear expectations, and enable monitoring and remedies. Suppliers can be held to contractual ESG obligations where these are defined and agreed.
Reference: CIPS L4M4 Study Guide (v2): LO "Implementation" - contractual clauses for ethics/ESG, monitoring and enforcement.

NEW QUESTION # 264
Which of the following items would you expect to find on a balance sheet? Select THREE

A. current liabilities
B. stockholders' equity
C. current assets
D. gross product sales
E. net product sales

Answer: A,B,C

Explanation:
current assets, current liabilities and equity can be found on a balance sheet. Net and gross sales will be found on a profit and loss account.

NEW QUESTION # 265
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