123+ Free CAI CAP2 Practice Questions

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Chartered Accountants Ireland — CA Proficiency 1 (CAP1)

Practice Questions121 questions

2026 Statistics

Key Facts: CAI CAP2 Exam

Examination Papers

Chartered Accountants Ireland

3.5 hours

Per Paper Duration

Chartered Accountants Ireland

50%

Pass Mark Per Subject

Chartered Accountants Ireland

€3,376

Programme Fee (4 subjects)

Chartered Accountants Ireland 2026/2027

Maximum Sittings

Chartered Accountants Ireland

12.5%

Irish CT Trading Rate

Revenue Commissioners

CAP2 comprises four 3.5-hour written papers — Taxation (ROI/NI), Audit & Assurance, SFMA, and Financial Reporting — each requiring 50% to pass. The 2026/2027 programme fee is €3,376 for all four subjects. Chartered Accountants Ireland administers CAP2 as the second stage of the ACA qualification after CAP1.

Sample CAI CAP2 Practice Questions

Try these sample questions to test your CAI CAP2 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 123+ question experience with AI tutoring.

1Under the Ethical Standard for Auditors (Ireland), which fundamental principle requires auditors to be straightforward and honest in all professional and business relationships?

A.Integrity

B.Objectivity

C.Professional competence and due care

D.Confidentiality

Explanation: Integrity is the fundamental principle requiring auditors to be straightforward and honest in professional and business relationships. It underpins public trust in the audit profession and is codified in the Ethical Standard for Auditors (Ireland) issued by IAASA.

2Which Irish body is responsible for setting auditing standards for audits of Irish companies?

A.Irish Auditing and Accounting Supervisory Authority (IAASA)

B.Chartered Accountants Ireland

C.Companies Registration Office

D.Central Bank of Ireland

Explanation: IAASA is the independent body that sets auditing standards in Ireland through the Ethical Standard for Auditors and ISA (Ireland). Chartered Accountants Ireland educates and represents members but does not set auditing standards.

3In the audit risk model, which component represents the risk that an assertion could be materially misstated before consideration of internal controls?

A.Inherent risk

B.Control risk

C.Detection risk

D.Sampling risk

Explanation: Inherent risk is the susceptibility of an assertion to material misstatement before considering controls. Control risk relates to controls failing to prevent or detect misstatements; detection risk is the risk the auditor fails to detect a material misstatement.

4What is the primary purpose of obtaining an audit engagement letter under ISA (Ireland) 210?

A.To document and confirm the terms of the audit engagement with management

B.To replace the statutory audit report required under the Companies Act 2014

C.To set the materiality threshold that must be applied throughout the audit

D.To obtain written confirmation that management has no related-party transactions

Explanation: ISA (Ireland) 210 requires an audit engagement letter (or equivalent contract) to help avoid misunderstandings regarding the scope, responsibilities, and limitations of the audit.

5An auditor identifies a material uncertainty related to going concern but concludes that adequate disclosure is made in the financial statements. What type of audit opinion is normally appropriate?

A.Unmodified opinion with a material uncertainty related to going concern paragraph

B.Qualified opinion due to a scope limitation

C.Adverse opinion because the entity may not continue as a going concern

D.Disclaimer of opinion because future outcomes are inherently uncertain

Explanation: Where adequate disclosure of a material going concern uncertainty is made, ISA (Ireland) 570 requires an unmodified opinion with an additional paragraph drawing attention to the disclosure, not a modified opinion solely because of the uncertainty.

6Which audit procedure provides the most reliable evidence for confirming the existence of trade receivables at year-end?

A.Direct confirmation from customers

B.Review of subsequent cash receipts after year-end

C.Analytical review of the ageing schedule

D.Inspection of sales invoices issued before year-end

Explanation: External confirmation obtained directly from customers is primary evidence of existence because it is generated by independent third parties. Subsequent receipts support valuation/cut-off; analytical review is less persuasive for existence.

7Under the Companies Act 2014 (as amended by the European Union (Adjustments of Size Criteria for Certain Companies and Groups) Regulations 2024, effective for financial years beginning on or after 1 January 2024), which condition must a company satisfy (among others) to qualify as a "small company" eligible for certain audit exemptions?

A.Not exceeding €15 million turnover in the financial year

B.Not exceeding €50 million turnover in the financial year

C.Having fewer than 250 employees in the financial year

D.Being listed on Euronext Dublin

Explanation: The 2024 size-criteria regulations raised company size thresholds by 25%. A company may now qualify as small under the Companies Act 2014 if it does not exceed two of three thresholds: turnover of €15 million (up from €12 million), balance sheet total of €7.5 million (up from €6 million), and 50 employees (unchanged). Meeting the turnover threshold is one qualifying criterion.

8What is the auditor's primary responsibility regarding fraud under ISA (Ireland) 240?

A.To obtain reasonable assurance that the financial statements are free from material misstatement whether caused by fraud or error

B.To guarantee that all fraud within the entity has been detected and reported to the Gardaí

C.To design and operate the entity's internal controls over financial reporting

D.To investigate all whistle-blower allegations regardless of materiality

Explanation: ISA (Ireland) 240 requires auditors to obtain reasonable assurance that financial statements are free from material misstatement due to fraud or error. Auditors must maintain professional scepticism and respond to identified fraud risks but do not guarantee detection of all fraud.

9Which threat to auditor independence arises when the audit firm provides internal audit services to an audit client?

A.Self-review threat

B.Self-interest threat

C.Familiarity threat

D.Advocacy threat

Explanation: Providing internal audit services to an audit client creates a self-review threat because the firm may be required to audit its own work. Ethical standards require safeguards or prohibition depending on the nature of the services.

10Key Audit Matters (KAMs) are required to be communicated in the auditor's report for audits of which entities under ISA (Ireland) 701?

A.Listed entities and entities required by law or regulation to report KAMs

B.All companies regardless of size

C.Only private companies with turnover exceeding €50 million

D.Only entities audited by the Comptroller and Auditor General

Explanation: ISA (Ireland) 701 requires communication of Key Audit Matters in the auditor's report for listed entities and other entities where KAM reporting is required by law or regulation.

About the CAI CAP2 Exam

CA Proficiency 2 (CAP2) is the second examination stage of the Chartered Accountants Ireland ACA qualification. Trainees sit four full papers: Taxation covering ROI and Northern Ireland, Auditing & Assurance under ISA (Ireland) and IAASA ethical standards, Strategic Finance and Management Accounting (SFMA) for advanced corporate finance and management accounting, and Financial Reporting under IFRS for individual and group accounts. Each paper requires a minimum of 50% to pass independently. The education fee includes textbooks, course materials, and the first exam attempt per subject.

Assessment

Four written papers (3.5 hours each): Taxation (ROI and NI), Auditing & Assurance, SFMA, and Financial Reporting

Time Limit

3.5 hours per paper (14 hours total across four papers)

Passing Score

50% per subject

Exam Fee

€3,376 (all four subjects, 2026/2027 programme) (Chartered Accountants Ireland)

CAI CAP2 Exam Content Outline

25%

Audit & Assurance

ISA (Ireland), ethical standards, audit risk, materiality, evidence, internal controls, fraud, group audits, going concern, modified opinions, and Companies Act 2014 audit requirements.

25%

Strategic Finance and Management Accounting (SFMA)

NPV, IRR, WACC, working capital management, budgeting, variance analysis, divisional performance, transfer pricing, EVA, and strategic cost management.

25%

Financial Reporting (IFRS)

IFRS 15 revenue, IFRS 16 leases, IFRS 9 financial instruments, IFRS 3/10 consolidation, IAS 12 deferred tax, IAS 36 impairment, and group financial statements.

25%

Taxation II (ROI and NI)

Corporation tax (12.5%/25%), capital allowances, close companies, CGT, VAT, PAYE/PRSI, stamp duty, group relief, transfer pricing, and R&D tax credit.

How to Pass the CAI CAP2 Exam

What You Need to Know

Passing score: 50% per subject
Assessment: Four written papers (3.5 hours each): Taxation (ROI and NI), Auditing & Assurance, SFMA, and Financial Reporting
Time limit: 3.5 hours per paper (14 hours total across four papers)
Exam fee: €3,376 (all four subjects, 2026/2027 programme)

Keys to Passing

Complete 500+ practice questions
Score 80%+ consistently before scheduling
Focus on highest-weighted sections
Use our AI tutor for tough concepts

CAI CAP2 Study Tips from Top Performers

1Study ISA (Ireland) and IAASA Ethical Standards alongside the Nangle auditing text — CAP2 Audit is heavily standards-based.

2Practice consolidation journals and deferred tax computations under time pressure for Financial Reporting.

3Memorise key Irish tax rates: 12.5% trading CT, 25% passive CT, 33% CGT, 25% DWT, 23% standard VAT — and UK/NI rates: 25% main CT, 20% VAT.

4Master NPV and IRR calculations plus variance analysis — SFMA rewards both computation and interpretation.

5Use CAI sample and practice papers alongside this MCQ bank to bridge to the written exam format.

6Understand close company rules, group relief, and capital allowances — common Taxation II themes.

7Review IFRS 15 five-step model and IFRS 16 lease accounting — frequently examined FR topics.

8Sit all four papers in one session if possible to avoid consuming multiple attempts across sittings.

Frequently Asked Questions

What papers are included in CAP2?

CAP2 consists of four papers: Taxation (ROI and NI), Auditing & Assurance, Strategic Finance and Management Accounting (SFMA), and Financial Reporting (IFRS). Each is examined as a separate 3.5-hour written paper.

What is the CAP2 pass mark?

Candidates must achieve a minimum of 50% in each subject independently. Credits in all subjects sat are required for an overall Pass adjudication at that sitting.

How much does CAP2 cost?

For the 2026/2027 academic programme, CAP2 enrolment is €3,376 for all four subjects (€1,688 per two-subject module). The fee includes textbooks, course materials, and the first exam attempt per subject.

How many attempts are allowed at CAP2?

Students may make a maximum of six examination sittings over three consecutive academic cycles. Attempts are counted per sitting, not per subject. A forfeited or deferred sitting still counts as an attempt.

When are CAP2 exams held?

CAP2 examinations are held at summer and autumn sessions. For 2025/26, summer exams run 22–26 June 2026 and autumn exams run 28 September–2 October 2026.

What is the Irish corporation tax rate on trading income?

Irish resident companies generally pay corporation tax at 12.5% on trading income. Non-trading or passive income such as rental income is typically taxed at 25%.

How does this practice bank relate to the official CAP2 exam format?

The official CAP2 papers are traditional written examinations combining computational and discursive questions. This free practice bank reformats syllabus content into 100 multiple-choice items for efficient revision across all four CAP2 subjects.