CPA (CPA Exam) case studies
CPA · Put your knowledge to work in context.
The Uniform CPA Examination is the licensing exam that individuals must pass to become licensed as U.S. Certified Public Accountants. The CPA case studies are 5 cases and about 4,353 words.
1Cutoff Errors, Projected Misstatement, and a Client That Won't Adjust
During the December 31, Year 2 audit of Kestrel Optics, the team set overall materiality at 250,000 (performance materiality 175,000) based on pre-tax income of 2.5 million. Three results are on the summary of uncorrected misstatements.
808 words, about 4 min2Two Performance Obligations, a Delivery Bonus, and a Constrained Estimate
On January 1, Year 1, Halden Systems enters a 1,200,000 contract to deliver a server cluster, install it in the customer's data hall, and provide three years of post-installation support. Installation requires significant customization of the cluster's firmware, and the customer cannot benefit from the cluster or the installation on its own; Halden has never sold installation separately.
802 words, about 4 min3S Corporation Losses, a Shareholder Loan, and a Guarantee
has been an S corporation since formation with one shareholder, Dana, who materially participates in the business. On January 1, Year 1, Dana's stock basis was 50,000.
835 words, about 4 min4Cash Flow Quality, Factored Receivables, and a Tight Covenant
Meridian Tools reports Year 2 revenue of 600 million (Year 1: 520 million), net income of 46 million (Year 1: 39 million), and cash from operations of 38 million (Year 1: 62 million). Days sales outstanding rose from 62 to 79 days and inventory days from 45 to 58.
907 words, about 5 min5Relying on a SOC 1 Report With a Carve-Out, a Gap, and a Failed CUEC
Ridgeway Health outsources payroll, benefits, and timekeeping to a third-party processor. Ridgeway's auditor plans to rely on the processor's SOC 1 Type 2 report covering October 1, Year 1 through September 30, Year 2, for a December 31, Year 2 audit.
1,001 words, about 5 min