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Corporate social responsibility (CSR) is best described as a company's commitment to:
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2026 Statistics
Key Facts: CPA Ethics and Governance Exam
5
Official Modules
CPA Program Subject Outline (Fourth Edition)
25%
Top Module Weighting (each)
CPA Program Subject Outline
225 min
Exam Appointment
CPA Australia
Open book
Exam Format
CPA Australia
APES 110
Core Ethics Code
APESB
100
Free Practice Questions
OpenExamPrep
CPA Australia's Ethics and Governance is a compulsory CPA Program subject built on the Fourth edition subject outline, with five modules and official exam weightings: Accounting and society 15%, Ethics 20%, Governance concepts 25%, Governance in practice 25%, and Corporate accountability 15%. The exam is open-book and computer-based, combining case-based multiple-choice questions with extended-response questions in a 225-minute appointment (about 195 minutes working time). CPA Australia does not publish a fixed pass mark or per-subject pass rate, reporting a scaled pass or fail. Module 2 centres on the APES 110 Code of Ethics including its five fundamental principles and conceptual framework of threats and safeguards.
Sample CPA Ethics and Governance Practice Questions
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1In the CPA Australia Ethics and Governance subject, the foundational obligation distinguishing a profession from a mere occupation is the duty to:
A.Place the good of society and the public interest ahead of personal interests
B.Maximise the fees charged to clients for advisory services
C.Guarantee a minimum return on every audit engagement
D.Restrict membership to protect the income of existing members
Explanation: A defining characteristic of a profession is that members accept an obligation to serve the public interest ahead of their own personal or commercial interests. The privileges and benefits of professional status carry this overriding obligation. The other options describe self-interested or commercial motives that are inconsistent with professional status.
2A 'profession' is generally characterised by all of the following features EXCEPT:
A.A specialised body of knowledge acquired through extended education
B.A guaranteed level of personal wealth for every member
C.A code of ethics governing member conduct
D.An obligation to serve the public interest
Explanation: Professions are characterised by a specialised body of knowledge, a recognised code of ethics, and a commitment to the public interest. A guaranteed level of personal wealth is not a characteristic of a profession; income varies and is not assured by professional status. The remaining options are recognised hallmarks of a profession.
3Under the regulatory framework governing the Australian accounting profession, which body is responsible for setting auditing standards that have the force of law for audits conducted under the Corporations Act 2001?
A.The Australian Securities Exchange (ASX)
B.CPA Australia's membership committee
C.The Auditing and Assurance Standards Board (AUASB)
D.The Australian Competition and Consumer Commission (ACCC)
Explanation: The Auditing and Assurance Standards Board (AUASB) is the independent statutory body that makes auditing standards under the Corporations Act 2001, giving them legal force for company audits. CPA Australia is a professional membership body, not a standard setter. The ASX operates the securities market and the ACCC regulates competition and consumer protection.
4The body responsible for setting accounting standards used in the preparation of financial reports under the Australian Corporations Act 2001 is the:
A.Australian Taxation Office (ATO)
B.Australian Securities and Investments Commission (ASIC)
C.Financial Reporting Council (FRC)
D.Australian Accounting Standards Board (AASB)
Explanation: The Australian Accounting Standards Board (AASB) develops and maintains accounting standards that have legal force under the Corporations Act 2001. ASIC enforces compliance but does not write the standards. The FRC provides broad oversight and strategic direction, and the ATO administers taxation, not financial reporting standards.
5Which regulator is primarily responsible for enforcing the Corporations Act 2001 and overseeing company directors, financial markets and financial services in Australia?
A.The Australian Securities and Investments Commission (ASIC)
B.The Reserve Bank of Australia (RBA)
C.CPA Australia
D.The Australian Prudential Regulation Authority (APRA)
Explanation: ASIC is the corporate, markets and financial services regulator that administers and enforces the Corporations Act 2001, including directors' duties. The RBA conducts monetary policy, APRA prudentially regulates banks and insurers, and CPA Australia is a professional membership body. Only ASIC has the enforcement role described.
6The 'social contract' between the accounting profession and society is best described as the idea that:
A.Members must sign a written contract with every client before providing services
B.Society grants the profession privileges in exchange for the profession serving the public interest
C.Accountants are employees of the government under a statutory contract
D.The profession agrees to limit competition in exchange for higher fees
Explanation: The social contract reflects an implicit exchange: society grants the accounting profession privileges such as self-regulation and status, and in return the profession commits to act in the public interest and maintain high standards. It is not a literal written contract, an employment relationship, or an agreement to restrict competition.
7A CPA Australia member working in business (as opposed to public practice) is sometimes described as a 'professional accountant in business'. The member's primary professional obligation is to:
A.Maximise the employer's share price by any means available
B.Always follow management instructions without question
C.Uphold the fundamental principles of the Code while serving the employing organisation lawfully
D.Disregard the Code because it applies only to public practice
Explanation: Professional accountants in business remain bound by the Code's fundamental principles and must comply with them while serving their employer through lawful and ethical means. The Code applies to all members, not just those in public practice. Blindly following instructions or pursuing profit by any means would breach the principles of integrity and professional behaviour.
8The International Federation of Accountants (IFAC) contributes to the global accounting profession primarily by:
A.Issuing professional licences to individual accountants worldwide
B.Directly auditing the financial statements of multinational companies
C.Setting income tax rates for member countries
D.Supporting development of international standards and ethics for the profession
Explanation: IFAC is the global organisation for the accountancy profession and supports the development, adoption and implementation of high-quality international standards, including ethics standards. It does not audit companies, set tax rates, or issue individual licences; those functions belong to firms, governments and national bodies respectively.
9Which of the following best describes the concept of 'professional judgement' as applied by accountants?
A.Applying relevant training, knowledge and experience to make informed decisions in the circumstances
B.Choosing the option that produces the highest fee for the firm
C.Always selecting the most conservative accounting treatment available
D.Following a checklist mechanically without considering context
Explanation: Professional judgement involves applying relevant training, knowledge and experience, within the context provided by accounting and ethical standards, to make informed and defensible decisions. It is not driven by fee maximisation, blanket conservatism, or mechanical checklist-following, each of which ignores the circumstances of the situation.
10CPA Australia members are subject to a disciplinary process. The MOST likely outcome for a member found to have committed a serious breach of the professional conduct requirements is:
A.An automatic criminal conviction imposed by CPA Australia
B.Sanctions ranging up to expulsion from membership
C.Mandatory imprisonment under CPA Australia rules
D.No consequences, because membership bodies cannot discipline members
Explanation: CPA Australia operates a disciplinary framework that can impose sanctions including reprimands, fines, conditions, suspension and ultimately expulsion from membership. It cannot impose criminal convictions or imprisonment, which are matters for the courts. The claim that membership bodies cannot discipline members is incorrect.
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