SOCPA Fellowship Managerial and Governmental Accounting Content: The 4 Topics and Their Weights

Last verified: 31 October 2026. Topics and weights can change, so check the Fellowship exam page on the SOCPA website and the exam topics document before you start studying. This is an independent guide and is not affiliated with the Saudi Organization for Chartered and Professional Accountants (SOCPA), the Ministry of Finance or any government body.

Managerial and governmental accounting is one of the Fellowship subjects. It has four topics: costing, management accounting, government accounting and non-profit organisations. The first two are mostly calculation; the other two are theory that leans on standard numbers and terminology.

Two parts in one session

The question bank and practice test on this site cover Part 1 only. Part 2 has its own essay questions guide. Registration, fees and dates are in the registration guide.

What changed in 2025

Before the third sitting of 2025 the subject had 30 multiple-choice questions and 3 essay questions. Since that sitting it has 36 multiple-choice questions and 2 essay questions, as set out in SOCPA's amendments to the structure and weights of the Fellowship exams. Two things follow for your studying:

• There are six more objective questions, so every topic appears more often and a gap in one item is harder to make up.
• There are fewer essay questions, and the 5 out of 25 minimum is a separate condition for passing, so do not leave the essays to the last minute. Anything you find in older sources about three essay questions no longer applies.

The four topics and their weights

In its Fellowship exam topics document SOCPA publishes a minimum and a maximum share for each topic. The numbers in the last column are approximate: we took the midpoint of each range (35%, 35.5%, 22.5% and 7%) and rounded to 36 questions. The paper you sit can have more or fewer questions in a topic than these numbers, anywhere inside the official ranges.

Cost accounting and management accounting together take about 26 of the 36 questions, roughly three quarters of Part 1. In the practice questions SOCPA published in September 2025 (21 multiple-choice questions), 6 were on costing, 10 on management accounting, 4 on government accounting and 1 on non-profits. SOCPA itself notes that those questions are educational and do not reflect the approved weights, so rely on the table above.

Topic 1: Cost accounting (about 13 questions)

Eight official items. The figures are worked on a calculator, so what counts is quick steps and care over what goes into a cost and what does not:

• Objectives and scope of cost and management accounting: The difference between financial, cost and management accounting by user, basis and timing. Short definition questions.
• Cost concepts and classifying cost elements: Direct and indirect, variable, fixed and mixed costs, product and period costs, relevant, sunk and opportunity costs, and splitting a mixed cost with the high-low method.
• Measuring production cost, absorption vs variable costing and overhead absorption: One of the most frequent items in the calculations: net income under variable costing, the profit gap between the two methods that comes from the change in inventory, predetermined overhead rates and over or under-absorption, allocating service department costs by the direct, step-down and reciprocal methods, and cost of goods manufactured from inventory balances. Fixed overhead is absorbed on normal capacity, following IAS 2.
• Job-order costing: The work-in-process control account, accumulating materials, labour and applied overhead per job, and working out a missing element from the job still in process.
• Process costing: Equivalent units under weighted average and FIFO, completion for conversion and direct materials, transferred-in cost which is 100% complete by definition, and normal and abnormal loss. This item shows up in the essay questions too.
• Contract and operation costing: The long-term contract: the percentage of completion and the revenue and cost recognised in the period (over-time performance under IFRS 15), plus batch and operation costing.
• Joint and by-product costing: Allocating joint cost by physical units, by sales value at the split-off point or by net realisable value, treating a by-product, and the decision to sell at split-off or process further (the joint cost does not enter it, because it is sunk).
• Just-in-time (zero inventory) systems: The features of zero-inventory production, backflush costing and when entries are recorded, and the effect of the system on inventory costs.

Topic 2: Management accounting (about 13 questions)

Fourteen official items, the widest topic. Most of its questions are a short case with figures that ends in a single number:

• Standard costing and variance analysis: Material (price and quantity), labour (rate and efficiency) and overhead variances, then the mix and yield variances, telling favourable from unfavourable. The standard quantity is measured on actual output. This item also appears in the essay questions.
• Inventory control and EOQ: The EOQ formula, orders per year, the reorder point and safety stock, and working out annual demand from the other data.
• Target costing and cost reduction: Target cost equals market price less target profit, value engineering, and continuous cost reduction (kaizen) in the production stage.
• Cost allocation and activity-based costing: Cost pools and cost drivers, the rate per activity, and comparing the product cost under this method with a single plant-wide rate.
• Cost-volume-profit analysis: Break-even in units and riyals, the sales volume for a target profit, the selling price that gives a stated profit, margin of safety and operating leverage, and a multi-product mix.
• Differential analysis and decision making: The special order, make or buy, dropping a product line, the scarce resource and ranking products by margin per unit of that resource. The rule: use relevant costs and revenues only. The break-even price for accepting a special order is a recurring question.
• External pricing and transfer pricing: Cost-plus pricing, target pricing and the transfer price between divisions: the floor is variable cost plus opportunity cost, the ceiling is the external market price, and whether an internal transfer is possible at all.
• Operating budgets: Sales, production and materials purchases budgets, the quantity of material to buy from production needs and opening and closing inventory, the cash budget and the flexible budget.
• Capital budgeting: Net present value, internal rate of return, payback and accounting rate of return, and choosing between two projects.
• Evolution of management accounting and responsibility centres: Cost, revenue, profit and investment centres, return on investment and residual income, and a case where the division manager's decision differs from the company's interest.
• Balanced scorecard: The four perspectives: financial, customers, internal processes, and learning and growth, with an example measure for each.
• Customer profitability analysis: Comparing the profit of two customers after loading service, delivery and discount costs. The biggest customer by sales can be the least profitable.
• Total quality management and costs of quality: Prevention, appraisal, internal failure and external failure costs, and placing a given item in one of them.
• Theory of constraints: Identifying the bottleneck, throughput contribution per unit of the scarce resource (sales less direct materials), and the best product mix under the constraints and demand limits.

Topic 3: Accounting in government entities (about 8 questions)

Six items. The questions need less arithmetic and more recall of the right standard and the right entry or treatment. The basis is the Public Sector Accounting Concepts and Standards Manual, 4th edition, Ministry of Finance, 2025, approved by Minister of Finance Decision 50 of 7/1/1447 AH (2 July 2025). It adopts the International Public Sector Accounting Standards (IPSAS) with their numbers, so learn the international number of each standard. The manual also includes a standard on interim financial reporting that IPSAS does not have. Royal Order 13059 of 16/3/1438 AH required government bodies to move from the cash basis to the accrual basis.

• Concept, features and objectives of government accounting: The public sector conceptual framework: users of reports, the objectives of financial reporting and the qualitative characteristics, and what sets a government entity apart from a business (budget and accountability, not profit).
• Moving from the cash basis to the accrual basis: The difference between the two bases, the Royal Order that required government entities to move, and Public Sector Standard 33 on first-time adoption of accrual accounting. Alongside it, government cash-basis procedures: receivables under collection for a warehouse shortage, and a disbursement authorisation order when a payment falls short of what is due.
• Presenting financial statements: Standard 1: the components of the statements, fair presentation and going concern. Standard 2: the cash flow statement. Standard 3: policies, estimates and errors, where a prior-year error is corrected through the accumulated surplus or deficit, not the current-year surplus. Standard 24: budget against actual.
• Accounting for expenses and revenue: Standard 23 on revenue from non-exchange transactions: taxes and transfers, when revenue is recognised and when a liability is recorded because the transfer carries conditions. Standard 9 for exchange transactions.
• Cash-generating and non-cash-generating assets: Telling the asset held for a commercial return from the one held to deliver a service, and impairment in each (Standard 21 for non-cash-generating and Standard 26 for cash-generating), and the basis of the recoverable amount.
• Inventories: Standard 12: inventory distributed free or for a nominal charge is measured at the lower of cost and current replacement cost, while inventory held for sale is measured at the lower of cost and net realisable value.

Topic 4: Non-profit organisations (about 2 questions)

The smallest topic and the easiest to memorise. The basis is the accounting standards for non-profit organisations issued by SOCPA. The two questions usually come from the types of net assets and the financial statements, and one focused evening is enough:

• Accounting standards for non-profit organisations: The standards SOCPA issues for these organisations, and what they do not cover the organisation takes from the IFRS for SMEs. SOCPA circulars allow a move to full IFRS on condition that all of it is applied and kept in use.
• Types of funds (net assets): Three types: unrestricted, restricted by the donor to a use or a time, and endowments whose principal stays permanently. And when funds move from restricted to unrestricted as the restriction ends.
• Financial statements: The statement of financial position, the statement of activities and the cash flow statement, and how the statement of activities differs from a business income statement.
• Accounting in non-profit organisations: Recognising contributions, releasing restrictions, in-kind gifts and volunteer services.
• Universities, hospitals and other non-profit organisations: Features of these sectors: tuition and grants in universities, patient revenue and donations in health units. Very few questions come from this item.

What to review first

1. Management accounting first (13 questions): fourteen items, but most are short. Start with cost-volume-profit, differential analysis, standard-cost variances and budgets. They recur, and some also appear in the essays.
2. Cost accounting second (13 questions): put absorption and variable costing first, then process costing (which also comes up in the essays), service department allocation and joint costs. Take job-order costing after them because it is simpler.
3. Government accounting third (8 questions): the least calculation of the four, so marks come from memory in a few days. Learn the standard numbers and what each one covers, then try the cash-basis entries that appeared in SOCPA's practice questions.
4. Non-profits last (2 questions): the three types of net assets and the three statements. Do not spend more than an evening on it.

Set aside a fixed part of every week for the essays, because they carry 25 marks and your score on them cannot fall below 5. The weekly schedule is in the study plan.

How the questions are asked

• Cases with figures for a manufacturing or trading company that end in one number: net income, a cost, a quantity or a price.
• Journal entry questions in government and non-profit accounting: which entry, and in which account.
• Short definition questions on concepts and standards, settled by exact memory.
• You can sit the exam in Arabic or English, so learn each term in both languages.

What to do after this guide

• See where you stand now with the 10 free questions, no sign-up: you get your score and your weakest topics.
• Order your time by the weights in the study plan.
• Prepare the essay part with the essay questions guide, because the question bank here does not cover it.

This is an independent guide and is not affiliated with the Saudi Organization for Chartered and Professional Accountants (SOCPA), the Ministry of Finance or any government body.