SOCPA Saudi CPA Exam Prep Exam Questions & Answers 2026 (1–10)

Q1An audit partner owns a significant number of shares in the audit client. Which threat to independence does this create?

• AFamiliarity threat
• BSelf-interest threat
• CAdvocacy threat
• DIntimidation threat

Q2Under IAS 1, when an entity reclassifies amounts previously recognised in OCI to profit or loss, this transfer is called:

• AA prior period adjustment
• BA reclassification adjustment (recycling)
• CAn error correction
• DAn accounting policy change

Q3Under IFRS 5, if the criteria for holding-for-sale classification are met after the balance sheet date but before the financial statements are authorised for issue:

• AThe asset is reclassified in the prior year balance sheet
• BThe entity always records the asset as held for sale retroactively
• CThe prior period is restated
• DThe asset is not classified as held for sale in the financial statements presented; but certain disclosures may be required if significant

Q4Under ZATCA regulations, the Automatic Exchange of Information (AEOI) for Saudi Arabia includes compliance with:

• AOnly the OECD Transfer Pricing Guidelines
• BOnly BEPS Action 13
• COnly the UN Tax Committee frameworks
• DThe Common Reporting Standard (CRS) for automatic exchange of financial account information with treaty partners

Q5Under ISA 720, if the auditor identifies a material inconsistency between the other information and the financial statements, and the financial statements are correct, the auditor shall:

• AQualify the audit opinion
• BAsk management to correct the other information, and if not corrected, include an 'other information' section in the audit report describing the inconsistency
• CIgnore it as other information is outside the audit scope
• DIssue a separate adverse opinion on the other information

Q6Under IFRS 3, the identifiable assets acquired and liabilities assumed in a business combination are measured at:

• AHistorical cost
• BFair value on the date of the acquisition
• CBook value in the acquiree's financial statements
• DNet realizable value

Q7Under Saudi Labor Law, the maximum probationary period for a new employee is:

• A1 month
• B3 months
• C6 months
• D90 days (3 months), extendable with written agreement to a maximum of 180 days (6 months) for technical and specialized roles

Q8In a Mudarabah contract, how are losses borne between the parties?

• ALosses are shared proportionally between the capital provider and the manager
• BLosses are borne solely by the capital provider (rab al-maal), unless due to the manager's misconduct
• CLosses are borne solely by the manager (mudarib)
• DLosses are split 50/50 regardless of capital contribution

Q9Under IFRS 13 Fair Value Measurement, the fair value hierarchy prioritizes inputs. Which level gives the highest priority?

• ALevel 2 – Observable inputs other than quoted prices
• BLevel 1 – Quoted prices in active markets for identical assets or liabilities
• CLevel 3 – Unobservable inputs
• DLevel 0 – Management estimates

Q10What is the key difference between zero-rated and exempt supplies under Saudi VAT law?

• AZero-rated suppliers can reclaim input VAT; exempt suppliers cannot
• BZero-rated supplies are outside VAT scope; exempt supplies are taxed at 0%
• CThere is no practical difference between zero-rated and exempt
• DExempt suppliers can reclaim input VAT; zero-rated suppliers cannot