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CPA Australia Financial-Accounting-and-Reporting

Financial-Accounting-and-Reporting

Exam Code: Financial-Accounting-and-Reporting

Exam Name: CPA Financial Accounting and Reporting Exam

Updated: Oct 05, 2026

Q&A Number: 100 Q&As

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CPA Australia Financial-Accounting-and-Reporting Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Application of specific accounting standards22%- Revenue recognition and ledger reconciliation
- Foreign currency transactions and translation
- Current and deferred income tax accounting
- Intangible assets and journal entries
Topic 2: Analysis of financial statements10%- Financial ratio calculation and interpretation
- Limitations of financial statement analysis
Topic 3: Business combinations13%- Consolidated financial statements
- Impairment and journal entries
- Goodwill measurement and disclosure
- Non-controlling interest and control concepts
- Accounting issues for business combinations
Topic 4: The accounting theory15%- Historical cost vs other valuation methods
- Agency and contracting theories
- Recognition criteria per conceptual framework
Topic 5: Financial statements15%- Statement of cash flows
- Statement of financial position
- Statement of profit or loss and other comprehensive income
- Discrepancy detection and correction
Topic 6: The financial reporting environment25%- Regulatory environment and reporting requirements
- Conceptual framework and elements of financial statements
- Role of International Accounting Standards Board
- Accounting regulation and GAAP/IFRS
- Accounting standards and policies
- Types of business entity and structure
- Users and developments impacting reporting

CPA Australia CPA Financial Accounting and Reporting Sample Questions:

Question #1
A multinational company is converting the methodology of reporting by its subsidiaries in various countries to make it uniform with the requirements of the International Financial Reporting Standards (IFRS). While changing the reporting methodologies, accountants have to apply certain judgments.
Which one of the following is not a valid motivation for decision making on reporting methodologies?

A. to be consistent with the methodologies followed in the home country of the company
B. to present the company's financial performance in the most favourable way
C. to present the financial statements in a manner that is understood by most users
D. to comply with the information demands of government bodies in home country


Question #2
In individual countries, Generally Accepted Accounting Principles (GAAP) is primarily a combination of

A. national company law and national accounting standards.
B. company law, accounting standards, local stock exchange requirements and international accounting standards.
C. national company law and local stock exchange requirements.
D. national company law, national accounting standards and local stock exchange requirements.


Question #3
Which one of the following examples would not represent an agency cost?

A. the cost of employing an internal auditor
B. the cost of preparing a cost-benefit report for a new project
C. the cost of preparing a financial report for shareholders
D. the cost of engaging an external auditor


Question #4
Historical cost accounting provides financial information that is

A. reliable but may not be relevant for decision making.
B. relevant and reliable for decision making.
C. relevant for decision making.
D. relevant but may not be reliable for decision making.


Question #5
Which one of these is a key principle of good corporate governance?

A. effective communication with shareholders
B. non-disclosure of directors' agency relationship with the company
C. effective management of the employees of the company
D. restriction of shareholders' rights in decision-making


Solutions:

Question #1
Correct Answer: B
Question #2
Correct Answer: D
Question #3
Correct Answer: B
Question #4
Correct Answer: A
Question #5
Correct Answer: A

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