| Exam Code | L4M4 |
| Exam Name | Ethical and Responsible Sourcing |
| Vendor | CIPS |
| Total Questions | 302 |
| Last Updated | 26-Oct, 2026 |
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Free L4M4 Practice Questions
Explore 5 free practice questions for the CIPS L4M4 exam and review the answers and explanations to support your preparation.
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Question 1
Single answerIn which circumstances would a procurement manager effectively use competitive tendering for the award of contracts?
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Option A:Correct
When the value of the procurement is high and special tooling is a major factor
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Option B:Correct
When the requirement is needed urgently and price is not the most important factor
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Option C:Correct
When the suppliers have technical expertise, and the value of the procurement is relatively high
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Option D:Correct
Show Answer & Explanation Hide Answer & Explanation
Correct Answer: C
Explanation
Competitive tendering is ideal for high-value contracts where technical expertise is essential. This method supports responsible sourcing by ensuring quality and aligning the supplier’s capabilities with the buyer’s needs, as required in more complex procurement scenarios.
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Question 2
Single answerAccording to the CIPS code of conduct, which laws should a procurement professional adhere to?
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Option A:Correct
all laws within the country they work in
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Option B:Correct
all international procurement legislation
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Option C:Correct
all laws published by international organisations such as ILO
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Option D:Correct
Show Answer & Explanation Hide Answer & Explanation
Correct Answer: D
Explanation
The CIPS Code of Conduct says to adhere to all laws of countries in which I practice. So if you're in the UK and procure stuff from China, you need to abide by both UK and Chinese laws, not just UK laws.
There's no international procurement laws- these are all different for different countries.
ILO doesn't publish laws.
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Question 3
Single answerA company has a low gearing of 20%. This shows that the company relies on equity capital and should therefore have less difficulty coping during tough economic times. Is this statement TRUE?
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Option A:Correct
Yes- a low gearing ratio means the company's finances are made up of equity rather than debt
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Option B:Correct
Yes- a low gearing ratio shows that the business is solvent and can deal with supply chain disruptions easily
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Option C:Correct
No- a low gearing suggests that the company is financed by long-term debt rather than equity
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Option D:Correct
Show Answer & Explanation Hide Answer & Explanation
Correct Answer: A
Explanation
the correct answer is 'Yes- a low gearing ratio means the company's finances are made up of equity rather than debt'.
Remember low gearing = good (based on equity), high gearing = bad (based on debt). Anything over 50% is considered high.
The two no answers are therefore incorrect and you can discount these straight away. The other yes answer is one of those answers which COULD be true, but isn't always true, and we'd need more information to know for sure. When you get options like this there will be one that is always right and one which is sometimes right - so always pick the always right one.
Dealing with supply chain disruptions is complex, and depending what the disruption is, how big it is, what the industry is etc determines whether a supplier can handle it or not. Because there's more factors to consider than just gearing, this isn't the right answer.
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Question 4
Multiple answersWhich of the following are signs that modern-day slavery might be taking place within the supply chain? Select THREE.
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Option A:Correct
suspiciously low labour costs
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Option B:Correct
poor quality products
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Option C:Correct
workers that live on-site
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Option D:Correct
suppliers who speak English as a second language
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Option E:Correct
Show Answer & Explanation Hide Answer & Explanation
Correct Answer: A, B, C
Explanation
The correct answers are; suspiciously low labour costs, workers living on site and poor quality products (as this signals that the workforce may be unskilled).
A low score on the CPI is a good thing (high scores are more likely to signify slavery concerns) and just because someone speaks English as a second language doesn't mean you automatically need to be suspicious. That would be prejudice.
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Question 5
Multiple answersForesttors 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?
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Option A:Correct
No. ESG is not within the scope of a contractual document and should always be treated informally
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Option B:Correct
No. Suppliers cannot be legally responsible for ESG compliance; this should be the buying organisation
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Option C:Correct
Yes, providing the contract does not require a supplier to do anything differently for ESG than they have done previously
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Option D:Correct
Show Answer & Explanation Hide Answer & Explanation
Correct Answer: D
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., , ] -