CPALE Coverage per Subject: Table of Specifications 2026

One of the most common questions from CPALE reviewees is: "What exactly is covered in the exam?" Knowing the precise scope of each subject lets you focus your review time on topics that actually appear in the board exam, instead of studying material that will not be tested.

This guide breaks down the coverage of all 6 CPALE subjects based on BOA Resolution No. 30, Series of 2022, which took effect starting the October 2022 CPALE.

Exam Structure Overview

Total: 450 MCQs | Passing: 75% overall average, no subject below 65%

Planning your review? Check our 3-month and 6-month study schedule to allocate time across subjects based on their weight and difficulty.

1. FAR (Financial Accounting and Reporting) — 70 MCQs

FAR is widely considered one of the most content-heavy CPALE subjects. It tests your knowledge of the full financial reporting framework, from the Conceptual Framework through specific PFRS/PAS standards.

For a deeper dive, see our complete FAR study guide.

Financial Reporting Framework

• Development and evolution of the financial reporting framework
• Standard-setting bodies (FRSC, IASB, FASB)
• Regulation of the accountancy profession in the Philippines

Conceptual Framework

• Objectives of general-purpose financial reporting
• Qualitative characteristics (fundamental and enhancing)
• Elements of financial statements (assets, liabilities, equity, income, expenses)
• Recognition and derecognition criteria
• Measurement bases (historical cost, fair value, present value)
• Presentation and disclosure concepts

Financial Assets (PFRS 9, PAS 32, PFRS 7)

• Cash and cash equivalents
• Trade and other receivables (allowance methods, factoring, pledging)
• Investments in debt and equity securities
• Financial instruments — classification, measurement, and impairment
• Hedge accounting basics

Non-Financial Assets

Financial Liabilities (PAS 37, PAS 20)

• Trade and other payables
• Provisions — recognition criteria and measurement
• Contingent liabilities and contingent assets
• Government grants and assistance

Shareholders' Equity

• Share capital transactions (issuance, treasury shares, retirement)
• Share-based payments (PFRS 2)
• Dividends (cash, property, stock, liquidating)
• Retained earnings (appropriated and unappropriated)
• Other comprehensive income components

Revenue Recognition (PFRS 15)

• Five-step revenue recognition model
• Identifying performance obligations
• Determining transaction price (variable consideration, time value)
• Allocating to performance obligations
• Recognizing revenue over time vs. at a point in time
• Contract costs and modifications

Financial Statement Presentation

2. Auditing — 70 MCQs

Auditing covers both theory (PSA standards, professional ethics) and practical application (audit procedures, working papers, adjusting entries). Our PSA standards guide provides additional detail.

Fundamentals of Assurance

• Nature and objectives of assurance engagements
• Types of audits (financial statement, compliance, operational)
• Responsibilities of the independent auditor
• Relationship between auditing and accounting

Philippine Standards on Auditing (PSA)

Planning and Risk Assessment:

Audit Evidence:

Audit Reporting:

Professional Ethics

• Code of Professional Ethics for CPAs
• Independence (in mind and in appearance)
• Confidentiality and professional secrecy
• Conflicts of interest
• Professional competence and due care

Practical Audit Application

• Audit working paper preparation and organization
• Audit procedures for major account balances (cash, receivables, inventory, PPE, payables, equity)
• Formulating adjusting and reclassifying journal entries
• Analyzing data for errors and irregularities
• Completing the audit engagement

3. MAS (Management Advisory Services) — 70 MCQs

MAS is divided roughly into Management Accounting (~57%, about 40 items) and Financial Management (~36%, about 25 items), with the remaining items on management consultancy concepts.

For key formulas, bookmark our MAS formulas cheat sheet.

Cost Accounting Fundamentals

• Cost concepts and terminology
• Cost classification (by function, behavior, traceability, relevance)
• Cost behavior analysis (fixed, variable, mixed, step costs)
• Product costs vs. period costs
• Manufacturing overhead allocation

Costing Methods

Standard Costing and Variance Analysis

• Setting standard costs (materials, labor, overhead)
• Material price and quantity variances
• Labor rate and efficiency variances
• Variable and fixed overhead variances (spending, efficiency, volume)
• Variance investigation and disposition

Cost-Volume-Profit Analysis

• Break-even analysis (units and pesos)
• Contribution margin ratio
• Target profit analysis
• Margin of safety
• Operating leverage
• Multi-product CVP analysis (sales mix)

Budgeting and Planning

• Master budget components (sales, production, purchases, cash)
• Static vs. flexible budgets
• Zero-based budgeting
• Continuous/rolling budgets
• Budget variance analysis
• Responsibility accounting

Strategic Cost Management

• Total Quality Management (TQM)
• Just-in-Time (JIT) systems
• Theory of Constraints
• Target costing and Kaizen costing
• Product life cycle costing
• Business process reengineering
• Balanced Scorecard

Financial Statement Analysis

• Liquidity ratios (current, quick, cash)
• Profitability ratios (ROA, ROE, profit margins)
• Efficiency ratios (turnover ratios)
• Solvency ratios (debt-to-equity, interest coverage)
• DuPont analysis
• Trend and common-size analysis

Working Capital Management

• Cash management (Baumol model, Miller-Orr model)
• Receivables management (credit policies, aging analysis)
• Inventory management (EOQ, reorder point, safety stock)
• Short-term financing options

Capital Structure and Financing

• Cost of capital (WACC, cost of equity, cost of debt)
• Capital structure theories (Modigliani-Miller)
• Leverage analysis (DOL, DFL, DTL)
• Long-term financing options (debt vs. equity)

Capital Budgeting

• Net Present Value (NPV)
• Internal Rate of Return (IRR)
• Payback period and discounted payback
• Profitability Index
• Modified IRR (MIRR)
• Project ranking and selection
• Risk analysis in capital budgeting

4. Taxation — 70 MCQs

Taxation is heavily based on the National Internal Revenue Code (NIRC) as amended by the TRAIN Law, CREATE / CREATE MORE Act, and the Capital Markets Efficiency Promotion Act (CMEPA, RA 12214, effective July 1, 2025). See our TRAIN Law and CREATE MORE Act guide for detailed coverage of recent amendments. The May 2026 CPALE is the first cycle expected to test CMEPA changes.

Tax Fundamentals

• Principles and limitations of taxation
• Inherent powers of the state (taxation, police power, eminent domain)
• Tax administration and the BIR
• Tax classifications (national vs. local, direct vs. indirect)
• Situs of taxation

Income Taxation — Individuals

• Classification of individual taxpayers (citizen, resident alien, non-resident alien)
• Graduated income tax rates (as amended by TRAIN Law)
• Compensation income taxation
• Business and professional income
• 8% flat income tax option for self-employed
• Passive income subject to final tax
• Capital gains taxation

Income Taxation — Corporations

• Classification of corporate taxpayers
• Regular Corporate Income Tax (RCIT) — 25%, or 20% for MSMEs with ≤ PHP 5M net taxable income and ≤ PHP 100M total assets (CREATE / CREATE MORE Act)
• Minimum Corporate Income Tax (MCIT) — 2% (reverted from CREATE Act's temporary 1% relief on July 1, 2023; CREATE MORE Act did not extend the lower rate)
• Special corporations (proprietary educational institutions, hospitals, GOCCs)
• Improperly accumulated earnings tax (repealed by CREATE Act, RA 11534)
• Branch profit remittance tax

Capital Markets Efficiency Promotion Act (CMEPA, RA 12214)

CMEPA took effect July 1, 2025 and amended several NIRC provisions reviewees should expect on the May 2026 CPALE:

• Stock Transaction Tax (STT) — reduced from 0.6% to 0.1% of the gross selling price on sales of listed shares
• Final Withholding Tax on FCDU / EFCDU deposits for residents — concessional 15% rate removed; interest is now subject to the regular 20% FWT
• Long-term deposit/investment interest — tiered exemption repealed; interest income is now subject to FWT
• Documentary Stamp Tax on the original issuance of shares — standardized rate
• Selected DST and other capital-markets-related provisions amended to encourage trading and investment

Gross Income and Deductions

• Inclusions and exclusions from gross income
• Allowable deductions (itemized vs. optional standard deduction)
• Items not deductible
• Net operating loss carry-over (NOLCO)
• Special allowable deductions

Transfer Taxes

Value-Added Tax (VAT)

• VAT-registered vs. non-VAT taxpayers
• Output tax and input tax
• Zero-rated and VAT-exempt transactions
• Filing and payment (quarterly and monthly)
• Withholding of VAT

Other Percentage Taxes

• Percentage tax for non-VAT taxpayers (3%)
• Franchise tax
• Amusement tax
• Tax on insurance premiums

Excise Taxes

• Alcohol and tobacco products
• Petroleum products
• Automobiles
• Sweetened beverages
• Cosmetic procedures
• Minerals and mineral products

Documentary Stamp Tax

• Taxable documents and transactions
• Rates and computation
• Exemptions

Local Taxation

• Local Government Code taxation powers
• Real property tax
• Local business tax
• Community tax
• Sharing of national taxes (IRA/National Tax Allotment)

Tax Remedies

• Government remedies (assessment, collection, distraint, levy)
• Taxpayer remedies (protest, appeal to CTA)
• Prescriptive periods for assessment and collection
• Compromise and abatement
• Tax refund and credit procedures

5. RFBT (Regulatory Framework for Business Transactions) — 100 MCQs

RFBT has the most items (100 MCQs) and covers a broad range of business laws. The Revised Corporation Code guide covers the corporate law portion in detail.

Obligations (Civil Code)

• Sources of obligations (law, contracts, quasi-contracts, delicts, quasi-delicts)
• Kinds of obligations (pure, conditional, with a period, alternative, joint, solidary)
• Extinguishment of obligations (payment, loss, condonation, confusion, compensation, novation)

Contracts (Civil Code)

• Essential requisites (consent, object, cause)
• Formation and perfection
• Defective contracts (rescissible, voidable, unenforceable, void)
• Interpretation of contracts
• Reformation of instruments

Law on Sales (Civil Code)

• Nature and form of the contract of sale
• Transfer of ownership and risk of loss
• Obligations of seller and buyer
• Warranties (express and implied)
• Conventional redemption and legal redemption
• Sale vs. contract to sell

Credit Transactions

Revised Corporation Code (RA 11232)

This is typically the heaviest-weighted topic in RFBT:

• Nature, classification, and attributes of corporations
• Incorporation process and requirements
• Corporate powers (express, implied, incidental)
• Board of directors/trustees — qualifications, duties, liabilities
• Stockholders' rights (voting, pre-emptive, appraisal, inspection)
• Stock and stockholders — classes, issuance, transfer
• Corporate officers — appointment, removal, powers
• Merger and consolidation
• Dissolution and liquidation
• Close corporations
• One Person Corporations (OPC) — new under RA 11232
• Revised provisions — perpetual corporate term, remote stockholder meetings
• Corporate governance

Partnership (Civil Code)

• Formation and characteristics
• Rights and obligations of partners
• Partnership property
• Dissolution and winding up
• Limited partnership

Agency (Civil Code)

• Creation and nature of agency
• Agent's authority (express, implied, apparent)
• Obligations of principal and agent
• Modes of extinguishment

Negotiable Instruments Law

• Requisites of negotiability
• Types (promissory notes, bills of exchange, checks)
• Negotiation vs. assignment
• Holders in due course
• Liabilities of parties (maker, drawer, endorser, acceptor)
• Presentment, dishonor, notice, discharge

Insurance Code

• Elements and characteristics of insurance contracts
• Classes of insurance (life, non-life, marine, fire)
• Insurable interest
• Concealment, representation, and warranties
• Claims and payment procedures

Other Business Laws

• Securities Regulation Code (SRC) — registration, exempt securities, insider trading
• General Banking Law — selected provisions
• Consumer Act of the Philippines
• Intellectual Property Code — patents, trademarks, copyrights
• Data Privacy Act — selected provisions relevant to business

6. AFAR (Advanced Financial Accounting and Reporting) — 70 MCQs

AFAR builds on FAR knowledge and covers specialized accounting topics. See our AFAR complete guide for study strategies.

Partnership Accounting

• Formation and initial investments (cash and non-cash contributions)
• Profit and loss distribution (salary, interest, bonus, remainder)
• Admission of a new partner (purchase of interest, investment)
• Withdrawal and retirement of a partner
• Partnership dissolution and liquidation (lump-sum and installment)
• Cash distribution plans and safe payments schedule

Corporate Liquidation

• Voluntary and involuntary dissolution
• Statement of affairs
• Statement of realization and liquidation
• Deficiency accounts

Joint Arrangements (PFRS 11)

• Joint operations vs. joint ventures
• Accounting by joint operators
• Accounting by joint venturers (equity method)

Business Combinations (PFRS 3)

• Acquisition method
• Identifying the acquirer
• Measuring consideration transferred
• Recognizing and measuring identifiable assets and liabilities
• Goodwill and bargain purchase
• Contingent consideration

Consolidated Financial Statements (PFRS 10)

• Control assessment (power, variable returns, linkage)
• Consolidation procedures
• Elimination of intercompany transactions (sales, services, loans, fixed assets)
• Non-controlling interests (full goodwill vs. partial goodwill)
• Changes in ownership without loss of control
• Investment in associates (PAS 28) — equity method

Foreign Currency Transactions (PAS 21)

• Functional currency determination
• Transaction date vs. settlement date
• Year-end translation of monetary items
• Translation of foreign subsidiary financial statements
• Translation adjustments in OCI

Home Office and Branch Accounting

• Reciprocal accounts
• Combined financial statements
• Billing above cost
• Shipments to/from branch

Revenue Recognition — Complex Transactions

• PFRS 15 advanced applications
• Franchise accounting
• Construction contracts (input and output methods)
• Consignment transactions
• Installment sales (cost recovery and installment methods)

Not-for-Profit Organization Accounting

• Fund accounting concepts
• Revenue recognition for NPOs
• Restricted vs. unrestricted funds
• Financial statements for NPOs

Government Accounting

Based on the Government Accounting Manual (GAM):

• Basic principles and concepts of government accounting
• Budget process for National Government Agencies (NGAs)
• Accrual basis under PPSAS (Philippine Public Sector Accounting Standards), per COA Circular 2015-007
• Journal entries for common government transactions
• Government financial statements (Statement of Financial Position, Statement of Financial Performance)
• COA rules and regulations

How to Use This Guide for Your Review

1. Prioritize by weight. FAR and RFBT tend to have the most content to cover. Start with subjects you find most challenging.

2. Cross-reference with your reviewer. Check which topics your review center or study materials cover, and fill any gaps.

3. Focus on recent updates. Pay special attention to:

   • PFRS 15 (Revenue) and PFRS 16 (Leases) in FAR
   • TRAIN Law, CREATE / CREATE MORE Act, and CMEPA (RA 12214, effective July 1, 2025) amendments in Taxation
   • Revised Corporation Code (RA 11232) and One Person Corporations in RFBT
   • Updated PSA standards in Auditing

4. Practice with exam-style questions. Knowing the topics is not enough — you need to apply them under timed conditions. Our platform offers practice questions aligned with the latest CPALE coverage for all 6 subjects.

5. Track your weak areas. Use this guide as a checklist. Mark topics you are confident in and focus your remaining review time on gaps.

Start practicing with AI-powered CPALE questions — our system adapts to your weak areas and focuses your review where it matters most.

Sources

• BOA Resolution No. 30, Series of 2022 — Official revised syllabi and Table of Specifications
• Philippine Standards on Auditing (PSA) — Auditing and Assurance Standards Council
• National Internal Revenue Code — Bureau of Internal Revenue
• Revised Corporation Code (RA 11232) — Official text
• Government Accounting Manual — Commission on Audit

Last updated: May 12, 2026. Based on BOA Resolution No. 30, Series of 2022 (effective October 2022), with tax content updated through CMEPA (RA 12214, effective July 1, 2025). Verify any syllabus changes with PRC/BOA before the exam.