Certified Public Accountant Licensure Exam coverage (CPALE)

The PFRS framework and the accounting for assets, liabilities, equity, income, and the financial statements.

• The financial reporting framework and the Conceptual Framework
• Financial assets: cash, receivables, and investments (PFRS 9, PAS 32, PFRS 7)
• Inventories (PAS 2)
• Property, plant and equipment (PAS 16) and investment property (PAS 40)
• Intangible assets (PAS 38), biological assets (PAS 41), and impairment (PAS 36)
• Financial liabilities, provisions, and government grants (PFRS 9, PAS 37, PAS 20)
• Shareholders' equity and share-based payments (PFRS 2)
• Revenue from contracts with customers (PFRS 15)
• Leases (PFRS 16)
• Income taxes (PAS 12)
• Employee benefits (PAS 19)
• Earnings per share (PAS 33)
• Share-based payment (PFRS 2)
• Events after the reporting period (PAS 10) and accounting policies, estimates, and errors (PAS 8)
• Non-current assets held for sale and discontinued operations (PFRS 5), and borrowing costs (PAS 23)
• Financial statement presentation and the statement of cash flows (PAS 1, PAS 7)

Business combinations, consolidations, partnerships, and specialized and government accounting.

• Partnership accounting: formation, operations, dissolution, and liquidation
• Corporate liquidation and the statement of affairs
• Joint arrangements (PFRS 11)
• Business combinations: the acquisition method and goodwill (PFRS 3)
• Consolidated financial statements and non-controlling interest (PFRS 10)
• Intercompany transactions and unrealised profit
• Associates and the equity method (PAS 28), and separate financial statements (PAS 27)
• Foreign currency transactions and translation (PAS 21)
• Home office and branch accounting
• Revenue: franchise, construction, consignment, and installment sales (PFRS 15)
• Not-for-profit organization accounting
• Government accounting (GAM and PPSAS)

Cost behavior, CVP analysis, budgeting, capital budgeting, and financial management.

• Cost concepts, classification, and manufacturing cost flows
• Cost behavior and the high-low method
• Cost-volume-profit (CVP) analysis
• Costing methods: job order, process, and activity-based costing
• Variable costing versus absorption costing
• Standard costing and variance analysis
• Budgeting and responsibility accounting
• Relevant costing and short-term decision making
• Performance management: ROI, residual income, EVA, and transfer pricing
• Strategic cost management (TQM, JIT, theory of constraints, balanced scorecard)
• Financial statement analysis and ratios
• Working capital management
• Cost of capital, capital structure, and leverage
• Capital budgeting (NPV, IRR, payback, profitability index) and project cash flows
• Quantitative methods and risk analysis

The audit process under the Philippine Standards on Auditing, internal control, evidence, and reporting.

• Fundamentals of assurance and the independent auditor
• Engagement acceptance, the terms of the engagement, and audit planning (PSA 210, PSA 300)
• Audit planning and risk assessment (PSA 200 to PSA 330)
• Risk assessment in depth: significant risks, IT controls, and service organisations (PSA 315, PSA 330, PSA 402)
• Fraud, error, and non-compliance with laws and regulations (PSA 240, PSA 250)
• Audit evidence and procedures (PSA 500 to PSA 580)
• Accounting estimates, related parties, litigation, and inventory (PSA 501, PSA 540, PSA 550)
• Using the work of others: internal audit, experts, and group audits (PSA 610, PSA 620, PSA 600)
• Audit sampling and analytical procedures
• Completing the audit, subsequent events, and going concern
• The auditor report and modifications to the opinion (PSA 700 to PSA 720)
• Quality management (PSQM 1 and PSQM 2) and professional ethics
• Other assurance engagements and related services: reviews, agreed-upon procedures, and compilations
• Practical audit application: working papers, account balances, and adjusting entries

Income tax, transfer taxes, VAT and percentage taxes under the NIRC as amended, and tax principles and remedies.

• General principles of taxation and the limitations on the power to tax
• Income taxation of individuals
• Gross income, exclusions, and allowable deductions
• Income taxation of corporations: RCIT, MCIT, and NOLCO under CREATE (RA 11534)
• Passive income and the Capital Markets Efficiency Promotion Act (CMEPA, RA 12214)
• Capital gains tax and the withholding tax system
• Estate tax: gross estate, deductions, and the net taxable estate
• Donor's tax: gross gifts, exemptions, and the cumulative computation
• Value-added tax: output tax, input tax, and the VAT payable
• Value-added tax: zero-rated and exempt sales, importation, and refunds
• Other percentage taxes and excise taxes
• Documentary stamp tax and local taxation
• Tax remedies and administration

Obligations and contracts, the Revised Corporation Code, negotiable instruments, and other commercial laws.

• Obligations: sources, kinds, and extinguishment (Civil Code)
• Contracts: requisites, defects, and reformation
• Payment, breach, delay, and the remedies of creditors
• Law on sales, warranties, the Recto Law, and the Maceda Law (RA 6552)
• Agency and the special power of attorney
• Credit transactions: commodatum, mutuum, deposit, guaranty, and suretyship
• Secured transactions: pledge, mortgage, antichresis, and preference of credits
• Partnership (Civil Code)
• The Revised Corporation Code (RA 11232): incorporation, shares, and capital
• The Revised Corporation Code: board powers, dividends, and shareholder remedies
• Negotiable Instruments Law (Act No. 2031): negotiability, negotiation, and holders
• Negotiable Instruments Law: liabilities, dishonor, forgery, and BP 22
• The Insurance Code
• Other business laws (SRC, FRIA, AMLA, IP Code, Data Privacy Act, banking)