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CIPS L4M4 Exam - Topic 1 Question 51 Discussion

Actual exam question for CIPS's L4M4 exam

Question #: 51
Topic #: 1

[All L4M4 Questions]

Procurement professionals should never appoint any suppliers that have a low credit rating. Is this statement TRUE?

AYes, because this rating indicates poor financial management practices

BNo, because a credit rating is only one financial tool to be used in determining financial competence

CNo, because a credit rating is not an appropriate decision-making tool

DYes, because this rating means that insolvency or liquidation is imminent

Show Suggested Answer

Suggested Answer: B

A credit rating is one of many tools used to assess a supplier's financial health. Responsible sourcing requires a comprehensive assessment of suppliers, considering multiple factors, to ensure a balanced and ethical approach to supplier selection.

by Louvenia at Jun 28, 2026, 04:53 AM

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Deeanna

12 hours ago

I think the statement is too absolute. There might be cases where a low credit rating doesn't mean a supplier is a bad choice, so I lean towards option C.

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Eugene

6 days ago

I'm not sure, but I feel like we had a practice question that emphasized looking at multiple financial indicators, not just credit ratings.

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Emeline

11 days ago

I remember discussing how credit ratings can be misleading, so I think option B makes sense.

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