CPA CFE Cheat Sheet 2026

The 30 highest-yield CPA CFE facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. What type of audit opinion is issued when the auditor concludes that misstatements are material but not pervasive to the financial statements? → Qualified opinion
2. Which level of the IFRS 13 fair value hierarchy uses unobservable inputs? → Level 3
3. A company uses kaizen costing. How does this approach differ from standard costing? → Kaizen costing targets continuous incremental cost reductions during the production phase
4. In the BCG growth-share matrix, what characterizes a 'cash cow'? → Low market growth and high market share
5. What does the Modigliani-Miller theorem (without taxes) state about capital structure? → In a perfect market, the value of a firm is independent of its capital structure
6. Under IAS 10, which of the following is an adjusting event after the reporting period? → Settlement of a court case that confirms a year-end obligation
7. In transfer pricing, what is the minimum transfer price that the selling division should accept? → The variable cost of production plus any opportunity cost of the transfer
8. Professional skepticism, which is particularly important during an audit engagement, is best described as: → An attitude that includes a questioning mind and critical assessment of audit evidence
9. How should government grants related to assets be presented under IAS 20? → Either as deferred income or by deducting the grant from the carrying amount of the asset
10. What does the economic order quantity (EOQ) model minimize? → Total of ordering costs and carrying costs
11. In a just-in-time (JIT) manufacturing environment, which of the following is a primary goal? → Eliminating waste and reducing inventory to near-zero levels
12. Which of the following is an example of a leading indicator in a balanced scorecard? → Employee training hours
13. Under IAS 21 The Effects of Changes in Foreign Exchange Rates, how are foreign currency monetary items translated at the reporting date? → At the closing (spot) rate at the reporting date
14. In Porter's Five Forces framework, which force analyzes the ease with which new competitors can enter a market? → Threat of new entrants
15. Which of the following is classified as an investment property under IAS 40? → Land held for long-term capital appreciation
16. Which variance measures the difference between actual fixed overhead incurred and the budgeted fixed overhead? → Fixed overhead spending (budget) variance
17. Under IAS 36 Impairment of Assets, what is the recoverable amount of an asset? → The higher of fair value less costs of disposal and value in use
18. Under the pecking order theory of capital structure, what is the preferred order of financing? → Internal funds (retained earnings) first, then debt, then external equity as a last resort
19. A company pursues a cost leadership strategy. Which of the following actions best supports this strategy? → Achieving economies of scale, tight cost controls, and operational efficiencies
20. What is the capital gains inclusion rate in Canada for 2024? → 50% of the capital gain is included in income as a taxable capital gain
21. Under Canadian corporate governance guidelines, what is the recommended composition of the audit committee? → Entirely independent directors who are financially literate
22. Under IAS 28, how should an investment in an associate be accounted for in the investor's consolidated financial statements? → Using the equity method
23. According to the COSO Internal Control framework, which component addresses the entity's commitment to integrity and ethical values? → Control environment
24. A company discovers a material error in prior year financial statements. Under IAS 8, how should this be corrected? → By restating the prior period comparative figures retrospectively
25. Under IAS 12 Income Taxes, what gives rise to a deferred tax liability? → Taxable temporary differences where the carrying amount exceeds the tax base
26. What does the concept of 'tone at the top' refer to in corporate governance? → The ethical climate and commitment to integrity set by senior leadership and the board
27. A company uses the high-low method to estimate costs. What does this method use to separate fixed and variable components? → The highest and lowest cost observations and their corresponding activity levels
28. The principle of professional competence and due care requires a CPA to: → Maintain knowledge and skill at the level of a competent professional and act diligently
29. What is the net present value (NPV) rule for capital budgeting decisions? → Accept projects with a positive NPV, as they are expected to add value to the firm
30. For GST/HST purposes, which of the following supplies is zero-rated in Canada? → Basic groceries (milk, bread, vegetables, fresh meat)