What is the SAIPA PE exam?

The Professional Evaluation is the official board exam required to register as a Professional Accountant (SA) with SAIPA.

What accounting framework is tested in the SAIPA PE?

The exam heavily emphasizes IFRS for SMEs along with South African tax laws and ISRE 2400 independent review standards.

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Sample SAIPA PE Practice Questions

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1Under IFRS for SMEs Section 13 (Inventories), how should inventory be measured at the reporting date?

A.At the lower of cost and estimated selling price less costs to complete and sell

B.At historical cost regardless of market value declines

C.At fair value through profit or loss

D.At replacement cost plus 20% margin

Explanation: Section 13.4 of the IFRS for SMEs requires entities to measure inventories at the lower of cost and estimated selling price less costs to complete and sell (net realizable value), requiring an impairment write-down if selling prices drop.

2Under the South African Companies Act 71 of 2008 Regulation 28, when is an Independent Review (rather than a full Audit) permitted for a private company?

A.When the company is not owner-managed and its Public Interest Score (PIS) is between 100 and 349 (and financial statements are independently compiled)

B.When the company has a PIS exceeding 500

C.When the company is a state-owned enterprise

D.Private companies are never allowed to conduct independent reviews

Explanation: Under Companies Regulation 28, a non-owner-managed private company with a Public Interest Score (PIS) of 100 to 349 whose financial statements are independently compiled is subject to an Independent Review rather than a mandatory full audit.

3Under Section 11(a) of the South African Income Tax Act, a Professional Accountant (SA) calculates taxable income for a client. Gross Trading Revenue = R5 000 000. Rent expense = R300 000, Staff wages = R1 200 000, Administrative costs = R200 000, and a traffic fine paid for speeding by a company driver = R5 000. What is the allowable tax deduction?

A.R1 700 000

B.R1 705 000

C.R1 500 000

D.R2 000 000

Explanation: Allowable trade deductions under Section 11(a) = Rent (R300 000) + Wages (R1 200 000) + Admin (R200 000) = R1 700 000. The R5 000 traffic fine is an unlawful act penalty and is strictly non-deductible under Section 23(o).

4A Professional Accountant (SA) advises a small business on Break-Even analysis. Selling price per unit = R150, Variable cost per unit = R90, Fixed costs = R360 000 per year. What is the Break-Even sales revenue in Rands?

A.R900 000

B.R600 000

C.R360 000

D.R1 200 000

Explanation: Contribution Margin Ratio = (R150 - R90) / R150 = R60 / R150 = 40% (0.40). Break-Even Sales Revenue = Fixed Costs / Contribution Margin Ratio = R360 000 / 0.40 = R900 000. (Alternatively, BEP units = R360k / R60 = 6 000 units × R150 = R900 000).

5Under IFRS for SMEs Section 17 (Property, Plant and Equipment), how is depreciation accounted for when an asset's residual value increases to an amount equal to or greater than its carrying amount?

A.Depreciation charge is zero until the residual value subsequently decreases below carrying amount

B.Depreciation continues at the historical rate regardless of residual value

C.The asset must be written off to profit or loss immediately

D.The asset is reclassified as investment property

Explanation: Section 17.19 specifies that if an asset's residual value increases to an amount equal to or greater than its carrying amount, the asset's depreciation charge is zero until residual value decreases below carrying amount.

6Under the ISRE 2400 (Revised) standard governing Independent Reviews, what level of assurance does an Independent Reviewer express in the review report?

A.Limited (negative) assurance stating nothing has come to the reviewer's attention causing them to believe the financial statements are not prepared fairly

B.Reasonable (positive) high-level audit assurance

C.Absolute 100% mathematical guarantee

D.No assurance whatsoever

Explanation: ISRE 2400 (Revised) dictates that an Independent Review provides limited assurance expressed in a negative form: 'Nothing has come to our attention that causes us to believe that these financial statements do not present fairly...'

7Under the South African Income Tax Act, a Small Business Corporation (SBC) under Section 12E enjoys progressive tax brackets. What are the key qualifying criteria for an SBC under Section 12E?

A.All shareholders must be natural persons, gross income must not exceed R20 million, and less than 20% of income consists of investment income or personal service rendering

B.Gross income must exceed R100 million per year

C.Shareholders must be public listed companies

D.The business must operate exclusively in gold mining

Explanation: Section 12E defines an SBC: (1) shareholders must be natural persons holding equity exclusively in that company; (2) gross income <= R20 million; and (3) investment/personal service income must not exceed 20% of total receipts.

8A SAIPA member acts as a business advisor preparing a cash budget for a retail client. Expected credit sales: January = R100 000, February = R120 000, March = R150 000. Customer collection pattern: 60% collected in month of sale, 40% collected in month following sale. What is total cash collected from credit sales in March?

A.R138 000

B.R150 000

C.R120 000

D.R142 000

Explanation: Cash collected in March = 60% of March sales + 40% of February sales = (60% × R150 000) + (40% × R120 000) = R90 000 + R48 000 = R138 000.

9Under IFRS for SMEs Section 20 (Leases), how does a lessee classify a lease that transfers substantially all risks and rewards incidental to ownership?

A.As a Finance Lease (recognizing an asset and a liability at present value of minimum lease payments)

B.As an Operating Lease (expensing payments on a straight-line basis)

C.As a government grant

D.As a short-term trade payable

Explanation: Under Section 20.4 of IFRS for SMEs, leases are classified as finance leases if they transfer substantially all risks and rewards of ownership. (Note: IFRS for SMEs retains the dual classification model of finance vs operating leases, unlike full IFRS 16).

10Under the SAIPA Code of Ethics, what fundamental principle requires a Professional Accountant (SA) to maintain professional knowledge and skill at the level required to ensure clients receive competent service?

A.Professional Competence and Due Care

B.Integrity

C.Confidentiality

D.Professional Behavior

Explanation: Professional Competence and Due Care obligable SAIPA members to maintain technical proficiency through continuous professional development (CPD) and act diligently in accordance with applicable professional standards.

About the SAIPA PE Practice Questions

Verified exam format metadata for SAIPA Professional Evaluation (PE) is pending. The practice questions above remain available while official exam length, timing, passing score, fee, and administrator details are reviewed.