The cranial nerve exam tests the 12 pairs of cranial nerves by assessing various sensory and motor functions. It involves testing each nerve's function through physical examinations like smell identification, eye movement, facial expression, hearing, swallowing, and tongue movement. The exam assesses the olfactory, optic, oculomotor, trochlear, trigeminal, abducens, facial, acoustic, glossopharyngeal, vagus, spinal accessory, and hypoglossal cranial nerves by evaluating senses like vision, hearing, taste and movements of the eyes, face, neck and tongue.