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ArticleCPA Ethics and Governance Exam Guide 2026: Format, Fees, Free Practice11 min read
Exam Review

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

145

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 standard multiple-choice questions (four options, one correct answer) with extended-response questions in a 225-minute appointment (about 195 minutes working time). CPA Australia sets the passing scaled score at 540 on a 100-900 scale and does not publish a per-subject pass rate. 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

Try these sample questions to review concepts for the CPA Ethics and Governance exam. Each question includes a detailed explanation. Start the interactive quiz above for the full 145+ question experience with AI tutoring.

1In the CPA Australia Ethics and Governance subject, the foundational obligation distinguishing a profession from a mere occupation is the duty to:
A.Put the good of society ahead of personal interests
B.Maximise the fees charged to clients for advisory services
C.Guarantee a minimum financial return on every engagement accepted
D.Restrict membership so that existing members' incomes are protected
Explanation: A defining characteristic of a profession is that its members accept an obligation to serve the public interest ahead of their own personal or commercial interests. CPA Australia's Ethics and Governance subject frames this as the obligation that comes with the privileges and benefits of 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.The Australian Charities and Not-for-profits Commission (ACNC)
D.The Australian Prudential Regulation Authority (APRA)
Explanation: ASIC is Australia's corporate, markets and financial services regulator, and it administers and enforces the Corporations Act 2001, including the directors' duties in sections 180 to 184. The RBA, ACNC and APRA each regulate a different field: monetary policy and payments, charities and not-for-profits, and prudential soundness respectively.
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 return for public-interest service
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 whatever means are available
B.Follow management's instructions without questioning their legality
C.Uphold the Code's fundamental principles while serving the employer
D.Disregard the Code, which applies only to members in public practice
Explanation: Professional accountants in business remain bound by the fundamental principles in APES 110 and must serve their employing organisation through lawful and ethical means. Part 2 of the Code is written specifically for members in business, so employment does not displace the principles.
8The International Federation of Accountants (IFAC) contributes to the global accounting profession primarily by:
A.Issuing professional practising certificates to individual accountants
B.Auditing the financial statements of large multinational companies
C.Setting income tax rates that apply across its member jurisdictions
D.Supporting development of international standards and ethics
Explanation: IFAC is the global organisation for the accountancy profession and supports the development, adoption and implementation of high-quality international standards, including the IESBA ethics code on which APES 110 is based. Licensing, auditing and taxing powers rest with national bodies, firms and governments.
9Which of the following best describes the concept of 'professional judgement' as applied by accountants?
A.Applying training, knowledge and experience to the circumstances
B.Choosing the treatment that produces the highest fee for the firm
C.Always selecting the most conservative treatment available
D.Following a standard checklist without considering the context
Explanation: Professional judgement means applying relevant training, knowledge and experience, within the framework set by accounting and ethical standards, to reach informed and defensible conclusions about the facts at hand.
10CPA Australia members are subject to a disciplinary process. The outcome available against a member found to have committed a serious breach of the professional conduct requirements is:
A.Automatic loss of any ASIC auditor registration
B.Sanctions ranging up to expulsion from membership
C.A fine imposed by ASIC at CPA Australia's request
D.A private warning that is never made public
Explanation: CPA Australia's disciplinary framework, set out in its By-Laws, allows the Disciplinary Tribunal to impose sanctions including admonishment, a severe reprimand, a fine, cancellation or suspension of a certificate, suspension from membership and ultimately forfeiture of membership (expulsion), and determinations are published with the member's name unless exceptional circumstances exist. CPA Australia cannot cancel a statutory registration or direct ASIC to impose a penalty; those are matters for ASIC and the courts under the Corporations Act.

About the CPA Ethics and Governance Exam

Ethics and Governance is a compulsory CPA Program subject covering the role of the accounting profession, professional ethics under APES 110, corporate governance concepts and practice, and corporate accountability, examined through standard multiple-choice questions (four options, one correct answer) and extended-response questions in an open-book computer-based exam.

Exam sponsor: CPA Australia. The requirements and fees below concern the certification or admission exam, separate from our free practice resources.

Assessment

Question count not published by the exam provider

Time Limit

225-minute appointment (approximately 195 minutes working time)

Passing Score

Scaled score of 540 (100-900 scale)

Exam / Certification Fees

Included in the CPA Program subject enrolment fee; amounts vary by region, so check the current CPA Australia fee schedule

Exam sponsor website

Reported exam pass rate: Not published per subject. CPA Australia reports Ethics and Governance results to candidates individually as a scaled score and grade and does not publish a per-subject pass rate. Exam sponsor website

Fees, eligibility, and exam policies can change. Confirm them with the exam sponsor before applying or paying.

Our practice resources: topics covered

We aim to reflect publicly available exam outlines and topic information in our study resources. Coverage, format, and difficulty may differ from the actual exam, and we cannot guarantee that every detail is accurate or current. Confirm exam requirements, fees, and policies with the official exam sponsor.

15%

Accounting and society

The nature of the accounting profession, the role of professional accountants, the regulatory and professional framework, public interest, the social contract, IFAC, and self-regulation.

20%

Ethics

Ethical theories, the APES 110 Code of Ethics including Independence Standards, the five fundamental principles, the conceptual framework of threats and safeguards, and ethical decision-making models.

25%

Governance concepts

Corporate governance definitions and theories, agency and stewardship, the corporate form, governance models, ASX Principles, the UK Code, and international and public sector perspectives.

25%

Governance in practice

Board role, independence and structure, audit and other committees, diversity, remuneration, shareholder rights, risk oversight, whistleblowing, data security, and consumer and competition law.

15%

Corporate accountability

Corporate accountability and CSR, the triple bottom line, limitations of financial reporting, integrated and sustainability reporting, ISSB and GRI, legitimacy and stakeholder theory, and climate disclosure.

Preparing for the CPA Ethics and Governance Exam

What You Need to Know

  • Passing score: Scaled score of 540 (100-900 scale)
  • Assessment: Question count not published by the exam provider
  • Time limit: 225-minute appointment (approximately 195 minutes working time)
  • Exam / certification fees: Included in the CPA Program subject enrolment fee; amounts vary by region, so check the current CPA Australia fee schedule Official sources

Using Our Practice Resources

  • Work through all 145 available questions
  • Review every answer and explanation
  • Track weak areas and revisit them
  • Use our AI tutor for tough concepts

CPA Ethics and Governance: Suggested Study Strategy

1Allocate study time using the official weightings: Governance concepts and Governance in practice together make up 50% of the exam.
2Master the APES 110 conceptual framework: be able to identify self-interest, self-review, advocacy, familiarity and intimidation threats and apply safeguards.
3Do not rely on the open-book format to learn content during the exam; timed multiple-choice and extended-response questions reward genuine understanding and quick application.
4Practise distinguishing governance theories (agency versus stewardship) and reporting theories (legitimacy versus stakeholder).
5Link concepts to Australian and UK frameworks, such as the ASX 'if not, why not' and UK 'comply or explain' approaches.
6Prepare for extended-response questions by practising structured ethical decision-making and applying it to scenarios.

Frequently Asked Questions

What is the format of the CPA Ethics and Governance exam?

CPA Australia states that the Ethics and Governance exam is a computer-based, open-book exam combining multiple-choice questions with extended-response questions. The appointment is about 225 minutes, with roughly 195 minutes of working time.

How many modules are in CPA Ethics and Governance?

The Fourth edition subject outline has five modules: Accounting and society, Ethics, Governance concepts, Governance in practice, and Corporate accountability. Their official exam weightings are 15%, 20%, 25%, 25% and 15% respectively.

Is the CPA Ethics and Governance exam open book?

Yes. The Ethics and Governance exam is open book, but the time limit means candidates should know the material well rather than rely on searching during the exam, especially for extended-response questions.

What is APES 110 and why does it matter for this subject?

APES 110 is the Code of Ethics for Professional Accountants (including Independence Standards) issued by the APESB. Module 2 focuses on its five fundamental principles and the conceptual framework of identifying threats and applying safeguards.

What is the passing score for CPA Ethics and Governance?

The passing scaled score is 540 on a 100-900 scale. Results are reported as a scaled score with a grade (Fail, Pass, Credit, Distinction or High distinction) rather than as a raw percentage.

Is Ethics and Governance a compulsory CPA Program subject?

Yes. Ethics and Governance is one of the compulsory subjects in the CPA Program and must be completed to progress toward CPA status.

How much study time should I plan for Ethics and Governance?

CPA Australia suggests about 10-15 hours per subject, per week over the semester, and study time should be allocated across the five modules using the official 15/20/25/25/15 weighting.

Does this practice bank match the real exam exactly?

This free bank contains 145 multiple-choice questions covering topics from the five official modules to build knowledge. The real exam also includes extended-response questions, which the MCQ practice helps you prepare for conceptually.