L5M5

Exam Practice Questions

This L5M5 exam PDF provides detailed practice questions, answers, and
explanations. These CIPS L5M5 exam practice questions are designed for IT
professionals, system administrators, and students preparing for CIPS Level 5
Advanced Diploma in Procurement and Supply certification.

Key Features

Exam-Oriented Questions: Realistic practice questions that mirror the format

and difficulty of actual certification exams.

Wide Coverage: Includes cloud computing, networking, security, AI, and

enterprise IT management exams.

Study-Friendly Format: Organized sections by exam type, enabling focused

preparation.

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This material is for personal study purposes only. Please do not

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Share some L5M5 exam online questions below.

[Link] organisation is an intergovernmental economic body with the purpose of stimulating
economic progress and world trade?
A. WTO
B. UN
C. ILO
D. OECD
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Organisation for Economic Co-operation and Development (OECD) promotes economic
development, international trade, and social protection policies. According to the L5M5 study guide
(old p.66, new p.95), the OECD coordinates policy among member countries to improve economic
performance and ensure financial safety nets. The WTO (A) focuses on trade rules, the UN (B)
covers peace and development, and the ILO (C) focuses on labour rights. Procurement professionals
should understand OECD guidelines for multinational enterprises, which influence global supply chain
governance.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.95

[Link] illegitimate use of a person’s role for gain is what form of ethical issue?
A. Bribery
B. Corruption
C. Fraud
D. Slavery
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.48) defines corruption as the illegitimate use of one’s role or position for
personal gain. This differs from bribery (A), which is offering or accepting inducements, and fraud (C),
which involves deception such as falsifying records or creating phantom suppliers. Slavery (D) refers
to forced labour. Procurement professionals must recognise corruption risks, particularly in
international supply chains, and implement controls such as segregation of duties, audit trails, and
whistleblowing policies.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.48

[Link] is reading a government-issued statement which helps a company decide which course of
action to take but is not legally binding.
What type of document is Marge reading?
A. Regulation
B. Directive
C. Statute
D. Guideline
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.185) explains the distinction between regulatory documents. Guidelines are
advisory documents providing best practice but are not legally binding. Regulations and statutes (A
and C) are legally binding, and directives (B) are binding once incorporated into national legislation.
Procurement professionals must be able to differentiate between binding legislation and advisory
guidelines to ensure compliance. While guidelines help shape ethical practices, failure to follow them
usually does not carry legal penalties.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.185

[Link] of the following is not a fraud risk in a procurement function?

A. Bid rigging
B. Duplicating payments
C. Phantom suppliers
D. Accepting presents
Answer: D
Explanation:
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

[Link] Modern Slavery Act (2015) ensures supply chains are free from forced and child labour.
Which of the following is a limitation of the Act?
A. It doesn’t apply if supply chains are outside the UK
B. It only applies to companies with a large turnover
C. It is optional to comply with
D. There are no repercussions for non-compliance
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Modern Slavery Act (2015) requires companies with a turnover above £36 million to publish a
slavery and human trafficking statement. The L5M5 study guide (p.45) highlights this as a limitation
because it excludes smaller businesses, even though they may also operate complex supply chains.
The Act applies regardless of where supply chains are located (so A is incorrect), and compliance is
mandatory (C is incorrect). Non-compliance can lead to civil proceedings (so D is incorrect).
Procurement professionals must be aware of this threshold and ensure compliance in larger
organisations.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.45

[Link] piece of UK legislation includes a provision for transparency in a company’s supply chain?
A. Companies Act
B. Modern Slavery Act
C. Working Time Directive
D. Health and Safety at Work Act
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Modern Slavery Act 2015 introduced a requirement for companies with turnover above £36
million to publish annual slavery and human trafficking statements, disclosing actions to ensure
transparency in supply chains. The L5M5 study guide (old p.62, new p.90) stresses its role in
combating forced labour and human trafficking. While the Companies Act (A) focuses on governance,
the Working Time Directive (C) regulates working hours, and the Health and Safety Act (D) ensures
workplace safety, only the Modern Slavery Act addresses supply chain transparency.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.90

[Link] for disadvantaged producers and the payment of a local living wage are principles of
which organisation?
A. The World Fair Trade Organisation (WFTO)
B. The International Labour Organisation (ILO)
C. The Organisation for Economic Co-operation and Development (OECD)
D. The European Union (EU)
Answer: A
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The World Fair Trade Organisation (WFTO) has a set of 10 principles designed to ensure fair and
sustainable trade. These include providing opportunities for disadvantaged producers, ensuring the
payment of a local living wage, promoting gender equity, and rejecting child labour and forced labour.
The L5M5 study guide (p.295) confirms that the WFTO focuses on disadvantaged producers in
developing countries, differentiating it from organisations like the ILO, which sets broader labour
standards, and the OECD/EU, which focus on economic or political cooperation. Procurement
professionals may encounter WFTO-certified suppliers, especially in commodities like coffee, cocoa,
and handicrafts.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.295

[Link] of association is a protected right under the ILO convention.

What does this allow workers to do?
A. Have a second job
B. Have work-life balance
C. Join a union
D. Avoid slavery
Answer: C
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The International Labour Organization (ILO) sets global labour standards, and freedom of association
is one of its fundamental rights. According to the L5M5 study guide (p.249), this right allows workers
to form or join trade unions and workers’ organisations to collectively defend their interests. It
ensures employees can negotiate working conditions, pay, and rights without discrimination or
retaliation. This principle underpins fair labour practices and corporate social responsibility. Other
options such as "having a second job" or "avoiding slavery" are separate issues covered under
different ILO conventions, but they do not define freedom of association.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.249

[Link] contain different types of clauses.

What is the name given to a clause that, if breached, allows damages but not termination of a
contract?
A. Condition
B. Warranty
C. Representation
D. Innominate term
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The L5M5 study guide (p.190) explains that a warranty is a contractual term where breach allows the
injured party to claim damages, but the contract continues. By contrast, conditions are fundamental
terms?breach may allow termination and damages. Representations are statements made in
negotiation, not binding terms, and innominate terms may be treated as conditions or warranties
depending on the breach. Understanding the difference is crucial for procurement professionals when
drafting and managing contracts, as it affects remedies and supplier relationships.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.190
[Link] do Fair Trade organisations protect producers of raw materials from poor economic
conditions?
A. A standard for working conditions is set
B. Final products are marketed as Fair Trade
C. Money is provided to communal funds
D. A minimum price is set for purchase of items
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
Fair Trade organisations protect producers economically by ensuring a minimum price for raw
materials, regardless of market fluctuations. The L5M5 study guide (old p.224, new p.303) explains
that this stabilises producer incomes against volatile commodity prices, tariffs, or currency risks.
While Fair Trade also involves better working conditions and community investment, the primary
economic safeguard is the guaranteed minimum price. Procurement professionals should recognise
how Fair Trade contributes to supply chain stability and resilience.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.303

[Link] (Corporate Social Responsibility) is a key factor in many business decisions.

Which of the following are benefits of having a CSR Policy? Select THREE
A. Improved reputation
B. Enhance competitiveness
C. Protection from all legal issues
D. Positive impact on wider society
Answer: A, B, D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
CSR policies allow businesses to integrate ethical, social, and environmental concerns into their
operations. The L5M5 study guide (p.28) highlights several benefits: an improved reputation (A),
enhanced competitiveness (B) by differentiating the company, and a positive impact on wider society
(D). However, CSR policies do not provide protection from all legal issues (C)?illegal activities can still
occur despite having a policy. CSR (sometimes referred to as ESG in modern usage) builds
stakeholder trust, supports compliance with global sustainability frameworks, and enhances long-term
resilience. Procurement teams are particularly important in embedding CSR into supply chains by
ensuring supplier compliance and accountability.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.28

[Link] WTO (World Trade Organisation) has several functions.

Which of the following is not a function of the WTO?
A. Set trade rules between countries
B. Deal with trade disputes between countries
C. Strive for full employment and high living standards
D. Ensure a high level of labour standards
Answer: D
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The WTO’s main functions include setting international trade rules, facilitating agreements, resolving
disputes between member countries, and supporting global trade liberalisation. It also works to
promote economic growth and development, indirectly aiming for higher employment and better living
standards. However, the WTO does not set or enforce labour standards?this role belongs to the
International Labour Organisation (ILO), which specifically governs employment rights, child labour
elimination, and health and safety at work. The L5M5 study guide (p.256) emphasises the importance
for procurement professionals to distinguish between global trade institutions such as the WTO and
labour-focused organisations like the ILO.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.256

[Link] forms of organisation form the Ethical Trading Initiative (ETI)? Select THREE
A. Private businesses
B. Public sector businesses
C. Governments
D. NGOs
E. Trade Unions
Answer: A, D, E
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
The Ethical Trading Initiative (ETI) is a leading alliance focused on improving working conditions in
global supply chains.
The L5M5 study guide (p.260) explains that ETI membership comprises:
Private businesses (such as retailers and brands),
Non-Governmental Organisations (NGOs), and
Trade Unions.
This tripartite approach enables collaboration between commercial, labour, and social interests to
improve standards. Governments are not direct members, although their legislation can influence
ethical trading. Public sector bodies may adopt ETI principles but are not core members. ETI’s Base
Code, founded on ILO conventions, outlines key principles including no forced labour, freedom of
association, and fair working conditions.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.260

[Link] of the following ISO standards relates to Environmental Management Systems?

A. ISO9001
B. ISO14001
C. ISO28000
D. ISO31000
Answer: B
Explanation:
Comprehensive and Detailed Explanation From Exact Extract of Documents:
ISO14001 is the international standard for Environmental Management Systems (EMS). The L5M5
study guide (p.277) explains that it requires organisations to establish frameworks for monitoring and
improving their environmental impact. ISO9001 (A) relates to quality management, ISO28000 (C) to
supply chain security, and ISO31000 (D) to risk management. For procurement, suppliers certified
with ISO14001 demonstrate a commitment to reducing waste, emissions, and environmental risks,
making this highly relevant to CSR and ESG.
Reference: Managing Ethical Procurement and Supply (L5M5) Study Guide, p.277
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