TheoryFree SOCPA Saudi CPA Exam Prep Practice Test
Take a free SOCPA Saudi CPA Exam Prep practice test for 2026 with questions, answers, explanations, PDF download and timed mock exam links.
SOCPA Saudi CPA Exam Prep Questions
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Q1An audit partner owns a significant number of shares in the audit client. Which threat to independence does this create?
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✓ Correct answer: Self-interest threat
Owning shares in an audit client creates a self-interest threat because the auditor has a financial stake in the client's performance, which could impair independence and objectivity.
Q2Under IAS 1, when an entity reclassifies amounts previously recognised in OCI to profit or loss, this transfer is called:
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✓ Correct answer: A reclassification adjustment (recycling)
IAS 1.92: a reclassification adjustment is the amount reclassified to P&L in the current or prior period that was previously recognised in OCI.
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:
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✓ Correct answer: The prior period is restated
IFRS 5.12: if criteria are met after the reporting period but before the financial statements are authorised, classification as held for sale does not apply to the statements being presented.
Q4Under ZATCA regulations, the Automatic Exchange of Information (AEOI) for Saudi Arabia includes compliance with:
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✓ Correct answer: Only the OECD Transfer Pricing Guidelines
Saudi Arabia adopted the OECD Common Reporting Standard (CRS) and is committed to automatic exchange of financial account information with other CRS participating jurisdictions.
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:
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✓ Correct answer: Ask management to correct the other information, and if not corrected, include an 'other information' section in the audit report describing the inconsistency
ISA 720.16-17: if other information is materially inconsistent (and the financial statements are correct), the auditor requests management to correct it; if not corrected, the auditor describes the inconsistency in the audit report.
Q6Under IFRS 3, the identifiable assets acquired and liabilities assumed in a business combination are measured at:
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✓ Correct answer: Historical cost
IFRS 3.18: identifiable assets acquired and liabilities assumed are measured at their acquisition-date fair values.
Q7Under Saudi Labor Law, the maximum probationary period for a new employee is:
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✓ Correct answer: 6 months
Saudi Labor Law Article 53: the probationary period shall not exceed 90 days, but may be extended by written agreement for technical and specialised roles to a total not exceeding 180 days.
Q8In a Mudarabah contract, how are losses borne between the parties?
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✓ Correct answer: Losses are borne solely by the capital provider (rab al-maal), unless due to the manager's misconduct
In Mudarabah, the capital provider (rab al-maal) provides funds and bears all financial losses, while the mudarib (manager) contributes expertise. The mudarib only bears losses if they result from their own misconduct or negligence.
Q9Under IFRS 13 Fair Value Measurement, the fair value hierarchy prioritizes inputs. Which level gives the highest priority?
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✓ Correct answer: Level 1 – Quoted prices in active markets for identical assets or liabilities
IFRS 13 establishes a three-level fair value hierarchy. Level 1 inputs (quoted prices in active markets for identical assets or liabilities) receive the highest priority. Level 3 (unobservable inputs) receives the lowest priority. There is no Level 0.
Q10What is the key difference between zero-rated and exempt supplies under Saudi VAT law?
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✓ Correct answer: Zero-rated suppliers can reclaim input VAT; exempt suppliers cannot
Zero-rated supplies are taxable at 0%, meaning the supplier can reclaim input VAT on related purchases. Exempt supplies fall outside VAT scope, and the supplier cannot reclaim any input VAT on purchases related to exempt activities.
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