Category: LatestBlogG

As you prepare for the CPA Canada CFE, knowing your role subject is very important.  A question that a lot of CFE writers have is this: Should you review in-depth topics outside of your role too? For example, if you have chosen Performance Management (PM) as your role, should you review in-depth Financial Reporting (FR), Management Accounting (MA), and PM topics exclusively, or should you also get very familiar with Finance (FN), Taxation (TX), and Assurance (AS) technicals? This article will give you useful tips and tricks how to study for these secondary topics.

CFE Blueprint

The CFE is designed to assess your competencies across a big range of technical areas and your ability to apply these competencies in real-world scenarios, which we call “cases.” As a PM candidate, for example, your main focus is PM competency. However, this does not mean you should overlook other technicals.

To understand what areas you should be focusing your study time, it’s important to understand the CFE passing profile.

To pass Day 2/Day 3 of the CFE, you must pass the following 4 levels:

• Level 1 – Sufficiency Level: Combined Cs and RCs from Days 2 and 3. This includes all competencies, meaning those outside of your role as well.
• Level 2 – Depth Level: Need C in FR or MA. Regardless of your selected role, FR and MA are tested for all candidates. In one or the other (not both), you need 3 to 5 Cs.
•  Level 3 – Role Level: Score Cs on Day 2 in your assigned role. This is role specific. For example, if your role is Assurance, you will need to score enough C-level grades in Day 2 pass. Aim for 4-5 Cs.
• Level 4 – Breadth Level: This one tests on everything: FR, MA, FN, AS, TX, SG. Counts both Day 2 and Day 3. To pass Level 4, you need at least 2 RCs in all areas.

In summary, studying your role will help you pass Level 3 and Level 4, studying for FR and MA will help you pass Level 2 and Level 4, but you are required to study all competencies to pass Level 1 and Level 4.

The good news is that you don’t have to study these in-depth! For example, if you selected PM as your Day 2 role, you must score Cs in PM. You must also score Cs in FR or MA . However, on Day 3, you can get a mix of RC and C on secondary areas, such as Assurance, Tax and Finance. Aim to get 70% Cs and 30% RCs in these secondary topics.

Tips for Studying non-role AOs

Here are some study tips for the secondary areas:

1. Focus on Core-level topics: There is no need to study complex topics. These secondary areas are tested at the same level as you’ve seen in Core 1 and Core 2. For example, in Tax, you can expect basic questions like personal & corporate tax returns, employee vs contractor, salary vs dividends, but you won’t get tough questions like Section 85 rollovers, re-structuring or amalgamations. Another example is CAS in Auditing. While CAS should be studied for Assurance role writers, it’s not needed for non-Assurance writers. Day 3 assurance AOs are very repetitive, there’s a very low chance you’ll be required to look up CAS.
2. Study historical AOs: Though there are diverse topics that can be tested in Day 3, ~80% of them are repetitions from past CFEs. I recommend that, as you practice Day 3 cases, you spend some time summarizing the AOs in an Excel file. This will help you see a pattern of the repetitive topics. I’ve already done this and have 2015-to-now CFE data in my coaching programs. This strategy will help you study smart and use your time efficiently.
3. Embrace cases and mock exams: Practicing cases and mock exams is the best method in your preparation for the CFE. Past cases provide opportunities to apply knowledge and skills in an environment similar to the actual exam. Similar to how you learn a new language, no matter how much theory you read, it’s the actual experience talking that helps you master the skill.

Conclusion

In conclusion, while your role on Day 2 is the main competency you must master, it’s essential to maintain a balanced approach during preparation. Study your role in-depth. Study FR or MA in-depth. Then study all other topics at the core-level, which means knowing 80% of the subject. Remember, you don’t need to be an expert in these secondary areas; just get comfortable with the basics and common topics. This balanced approach will give you the confidence and skills needed to tackle all parts of the CFE successfully.

Extra resources

I’m Gevorg. I’m an instructor and CPA Canada exam coach. If you want CFE tutoring, sign up for my CPA CFE Review Course, for a comprehensive learning package.

Similar to prior CPA Canada Common Final Exams (CFEs), the May 2024 CFE had two Day 1, one Day 2 and three Day 3 cases.

The following Day 1 cases were tested:

• Neptune Point Fisheries Inc. (NPF) V1 (Download)
• Kingsdale Tea Inc. (KTI) v2 (Download)

The following Day 2 and Day 3 cases were tested:

• Day 2 (Download)
  • Fancy Luxury Jewellery Inc. (Fancy) (300 minutes)
• Day 3 (Download)
  • Best Buddies Inc. (BB) (85 minutes)
  • Laura Saeed GR Inc. (LS) (85 minutes)
  • Lotoski (70 minutes)

For the September 2024 CFE, the following Day 1 cases will be tested:

• Amuzu Parks Inc. (API) v1
• J.R. Pets Inc. (JRP) v2

For the May 2025 CFE, the following Day 1 cases will be tested:

• Neptune Point Fisheries Inc. (NPF) v2
• Viviana’s Trattoria Ltd. (VTL) v1

For the September 2025 CFE, the following Day 1 cases will be tested:

• Amuzu Parks Inc. (API) v2
• Meadowlark Entertainment Inc. (MEI) v1

Where can I get the solutions to Neptune Point Fisheries Inc. (NPF) V1?

The solutions for May 2024 CFE NPF v1 will NOT be released by CPA Canada until later in 2026. I have written sample strong answers to NPF v1 case. It’s a realistic answer that you can use for self-debrief or send for marking. You can obtain it from here.

Will I get these cases in Capstone 2?

If you are registered for the Capstone 2 module for Winter 2025 or Summer 2025, you will not receive the Day 1 case solutions at the module. You should download using the links above. If you are someone challenging the exam, such as an internationally trained accountant applying under MRA/MOU, please also download using the links above.

How do I prepare for the CFE?

There are several prep methods for the CFE. You will need to focus on these three items:

1. Technical knowledge
2. Case writing skills
3. Strategy

I speak a lot about these items on my YouTube channel and webinars. You can check out my latest videos.

Technicals:

• Know the key topics on each of the competencies
• Distinguish depth from breadth
• Debrief

Case writing skills:

• It’s all about following the CPA Way
• Know your case inside out
• Integrate throughout the case

Strategy:

• Prepare a study plan
• Obtain study materials
• Get support and resources

Pass the CPA Canada CFE Exam

I’m Gevorg. I’m an instructor and CPA Canada exam coach. If you want tutoring with me, sign up for my CPA CFE Review Course, for a comprehensive learning package.

In CPA Canada’s CFE, Core 2 and PM exams, you can expect to see complex management accounting (MA) topics tested. One example of such topic is equivalent units. Understanding how to calculate equivalent units is a fundamental concept, particularly in the context of process costing. This is often tested, particularly for the Core 2 multiple-choice questions (MCQs). Determining equivalent units are important in determining total units of production, but it also influences cost allocation decisions in manufacturing processes. In this article, you will see the comparison between FIFO and weighted average, with an easy to understand example.

What’s the point of process costing?

Process costing is used to figure out how much it costs to produce items that are very similar or identical, like chocolate bars or cans of soda. In this costing system, costs are tracked for each step, or “process,” in the production, and then the total cost is divided by the number of units produced. This way, we can find out the cost per unit. It’s useful for companies making large quantities of similar products because it helps them understand cost per item.

Something similar to process costing is job costing. While process costing tracks costs for huge number of identical products, job costing tracks costs for specific, individual jobs or orders, which are often unique. For example, building a custom piece of furniture or a unique construction project would use job costing. In this case, we would track the costs of materials, labor, and overhead for each specific job separately. Both methods help businesses understand and manage their production costs, but they are used in different situations based on the type of products being made.

How does process costing work?

Process costing works by tracking the costs of each step, totaling the costs, and dividing by the total number of items produced. This is called the Weighted Average method and there are other methods too (discussed below).

Example:

Imagine a company that makes chocolate bars. They have 3 main steps in their production process:

1. Mixing ingredients
2. Molding the chocolate into bars
3. Packaging the bars

In process costing, the company tracks costs at each step. Let’s say in one month, the costs are as follows:

1. Mixing ingredients: $1,000
2. Molding: $800
3. Packaging: $200

In that month, the company makes 10,000 chocolate bars. To find the cost per chocolate bar, they add up all the costs ($1,000 + $800 + $200 = $2,000) and then divide by the number of chocolate bars (10,000). So, the cost per chocolate bar is $2,000 ÷ 10,000 = $0.20.

This means it costs $0.20 to make each chocolate bar, and this helps the company understand their production costs and set their selling prices.

What’s Equivalent Units?

Equivalent units (EU) is a way to measure partially completed products as if they were fully completed. The reason we do it is because it helps to calculate the costs of products that are not yet finished at month-end or year-end. Without this, we can’t assign costs to products in different stages of completion, so we won’t know the true costs at period end.

For example, a factory is making chocolate bars and they have 200 bars that are halfway done at month-end. Instead of counting these as 200 incomplete bars, we use equivalent units to measure them. Since they are halfway done, it’s like having 100 fully completed chocolate bars. This helps the factory calculate costs more accurately for the partially finished products.

What’s FIFO and Weighted-Average?

FIFO (First-In, First-Out) and WA (Weighted-Average) are methods used to assign costs to units produced. FIFO assumes that the oldest costs are assigned to the units completed first. For example, for a factory is making chocolate bars, FIFO means the cost of the ingredients and labor from the beginning of the production period are used first to calculate the cost of the finished bars. This helps to track the flow of costs more accurately based on the production timeline. On the other hand, the Weighted-Average method blends all the costs together to find an average cost per unit. So, if the factory had different costs for chocolate bars at different times, the Weighted-Average method would add up all the costs and divide by the total number of bars produced to get a single average cost per bar. This makes it easier to calculate costs when there are many different costs over a period.

FIFO, WA, and EU are all tools used to calculate the cost of producing products. A company will choose either the FIFO or WA. Equivalent units help measure the production activity by converting partially completed products into an equivalent number of fully completed products. The FIFO method uses these equivalent units by assigning the oldest costs to the units completed first, which helps track costs in the order they were incurred. The Weighted-Average method, on the other hand, averages out all the costs over the period, using equivalent units to find a single cost per unit for both completed and partially completed products. Together, equivalent units and the chosen method (either FIFO or Weighted-Average) help companies accurately calculate production costs.

What’s conversion costing and WIP?

Conversion costing is the cost spent to turn raw materials into finished products. For example, in the case of chocolate bars, conversion costing means the cost for mixing, molding, and packaging. Work In Progress (WIP) are the products that are still being made and not finished yet. In the case of chocolate bars, WIP means the bars that are partially made and not ready to be sold.

Full Example

Let’s imagine a chocolate bar manufacturing company.

• Beginning Inventory: At the start of the month, the company has partially finished chocolate bars. These bars are 70% complete in the process (mixing, molding, and packaging) and have all the necessary materials (100% complete for materials like cocoa, sugar, and milk).
• Ending Inventory: By the end of the month, the company has some chocolate bars that are still in the production process. These bars are 20% complete in terms of the conversion process and have all the necessary materials.
• Units Started: During the month, the company starts production on 200,000 chocolate bars.
• Transferred Out: By the end of the month, 160,000 chocolate bars are fully completed and moved out of the production line to be ready for sale.
• Ending Inventory: There are 90,000 chocolate bars still in production at the end of the month.

In CPA Canada exams, this information would be presented like this:

The requirement is to determine equivalent units (EU).

Solving under FIFO:

FIFO separates the cost of current work, and work in beginning inventory. It also assumes all beginning WIP are transferred out first (i.e. FIFO is first-in, first-out). This means that the ending WIP is what was started in the current month.

Under FIFO, the approach would be:

• Step 1: If we started 200k units this period, and transferred out 160k units, with 90k units left in ending inventory, this means we had beginning inventory of 50k units (160k units transferred out + 90k units in ending inventory – 200k started this period). This also means 250k units were worked on during this period (160k units transferred out + 90k units in ending inventory). Because 100% of materials are used at the beginning of the process in FIFO, 0% of materials need to be added to complete the beginning inventory. For conversion costs, only 70% is added at the beginning, which means 30% is needed to complete beginning inventory. Think of this as what you have left to do, or what is left to complete the inventory.
• Step 2: Now we need to determine the units started and completed. This means that these units are 100% completed with respect to conversion and material costs. If we started with 50k units in beginning inventory, these units would have been transferred out first as part of FIFO. Since we transferred out 160k units, this would leave 110k units that were started and transferred out in addition to the beginning inventory.
• Step 3: For ending inventory, you will take the ending inventory units, and multiply them by their corresponding percentage of completion. This will become your beginning inventory for the next period.

For total EU, this is the sum of the beginning inventory, the units started and completed, and the units still in the ending inventory. The answer is 200K EU for materials, and 143K for CC.

We format our answer in CPA Canada exams like this:

Solving under WA:

Weighted average takes the units completed during the period and adds it to your ending WIP.

• Step 1: Identify the units completed (transferred out) – Units being transferred out are transferred with both material and conversion costs. This would be 160,000 for both.
• Step 2: Identify the ending WIP – For materials, there is 100% completion, and with 90,000 units in ending inventory, this would be 90,000 units for materials. However, there is still work to be done on these units, as conversion costs are only 20% complete. Using the WA method, we don’t specifically know which units are complete, so the 20% will be applied to the full 90,000 units.

For total equivalent units, this is the sum of the units transferred out, with your ending inventory. The answer would be 250K EU for materials, and 178K for CC.

We format our answer in CPA Canada exams like this:

Conclusion

Both FIFO and WA methods calculate equivalent units to determine the total units of production. The specific calculation differs in terms of how ending work in process inventory is treated: FIFO focuses on the partially completed units in ending WIP inventory separately, while the WA method combines all units completed and in process to calculate an average cost per equivalent unit.

Extra resources

Extra resources are available in Gevorg’s CPA review programs.

As you’re working toward your CPA Canada designation, the CPA Canada Practical Experience Requirements (PER) can seem daunting. One common question I get is: “Can I submit experience reports on items not pre-assessed by CPA Canada, and will it impact my ability to get that experience accepted?” Here’s a straightforward answer to help you navigate this part of your CPA journey.

Understanding the Pre-Assessment

The pre-assessment is designed to ensure you have at least one Level 1 technical competency, which allows you to start reporting your experience. However, it’s important to know that this pre-assessment isn’t rigid.

You aren’t restricted to only those tasks or examples that were pre-assessed.

It’s perfectly fine to write about examples and job tasks that differ from what was pre-assessed or even from your initial job description. As you progress in your career, it’s normal—and expected—to take on tasks beyond your original scope of work. Promotions, new tasks, and special projects often come your way, adding valuable experiences that weren’t part of your initial role.

What Really Matters in PER

Here’s what truly counts in your PER submissions:

1. Complexity: Ensure your examples demonstrate relevant and complex tasks.
2. Exposure: Have at least 3 examples for level 2.
3. Supervisor support: Your supervisor must support you by providing extra tasks and special projects.
4. Following guidelines: Follow the guidelines provided by CPA Canada and my templates for your PER submissions to ensure you hit all requirements.

The pre-assessment is a starting point, not a limiting factor. Your evolving job responsibilities and the additional experiences you gain are valuable and should be included in your reports. The key is to clearly articulate how these experiences meet the CPA competencies and get them validated by your supervisor.

Conclusion

In summary, don’t worry too much about sticking to the pre-assessed items. The pre-assessment’s primary role is to ensure you’re on the right track. As long as you provide relevant, complex examples and follow the necessary guidelines, your additional tasks and responsibilities will contribute positively to your CPA Canada PER.

Extra resources

Extra resources are available in Gevorg’s CPA PER Review programs.

Successfully completing the CPA Canada Common Final Exam (CFE) requires lots of preparation and adaptability. Although your studying will cover a range of technical topics, coming across new AOs during the exam is highly probable, adding an unpredictable element to the challenge. In this article, you’ll learn smart approaches and clever exam tips for addressing unfamiliar AOs to help you pass.

New CFE Day 1 AOs

Let’s say you’re writing Day 1 and you come across an unfamiliar AO. This can a strange strategic issue or a quants you’ve never seen before. Don’t panic. The AOs may change, but the structure of Day 1 remains unchanged. Follow the standard CPA Way framework:

• Issue statement – What strategic decision needs to be made? Summarize it in a single sentence.
• Quantitative analysis – The Day 1 quants are driven by the BOD objectives and the case facts in dialogue / Appendices. Review the BOD objectives one more time and link to the appendices. What are the objectives? What quants makes most sense here? Given the available information, what reasonable calculation can you do? For example, if EBITDA multiple is given, valuation is a reasonable calculation. If a discount rate is given, NPV is a reasonable calculation. If multiple products are given, a CM analysis is reasonable.  You can practice a range of calculation exercises using the Day 1 Quants Mastery.
• Constraints / Objectives –Discuss the effect on the company’s financial and non-financial constraints, as well as the objectives.
• Qualitative analysis – No matter how different an AO is, the qual remains the same: compare the advantages and disadvantages (i.e. pros vs cons). Format your quals as case fact + implication statement + impact + integration (where relevant). Each pro and con should specifically say why it is is advantage or disadvantage for the company, which is covered in the “impact” part.
• Recommendation – Based on quantitative, constraint, objectives and qualitative, recommend the company to proceed with the strategic issue or not Be sure to justify your recommendation and speak about the strategic direction this AO supports.

In Day 1, you often don’t see new AOs; the exam format and content is repetitive. The biggest hurdles are:

• Finding the strategic issues
• What quants tool to use
• Strategic direction
• Additional (operating) issues

For more help with Day 1, review my coaching resources and read this blog on how to approach the Day 1.

New CFE Days 2/3 AOs

New AOs in Days 2 and 3 are typically “time traps.” They are long, convoluted AOs that will take too much time to solve. Here are some tips on how to handle them:

• Required: Read the required carefully. What are you being asked to address? What triggers jump out at you? For example, let’s say the case says: “Yasmin asks you to prepare a capital budget analysis of the project, discuss assumptions and risks that would affect your analysis, and make a recommendation.” The triggers are: capital budget analysis, assumptions/risks, recommendation. This is what you have to do: calculate the capital budget in Excel (which usually means NPV), write assumptions/risks in Word memo, and come up with a recommendation. Even if the Appendix is confusing and gives you lots of information, keep the required in mind and simply answer it to the best of your ability. 
• FR / Audit / Tax: If you encounter an FR, Audit or Tax issue you’re not familiar with, use Knotia (eg. CPA Canada Handbook) to search for the keywords and find the applicable standard. As navigating Knotia can be challenging without prior experience, I recommend you dedicate a portion of your debrief time to familiarize yourself with Knotia. Understand how to access it, where to search, and the most effective approach to exploring the various sections. A tip for finding results quicker is to use quotation marks. For example, if you have a tax AO about operating benefit, search using quotation marks (“operating benefit”) which will make Knotia look for that specific phrase, as opposed to each word separately. This will help you find the criteria faster.
• Apply case facts: When you don’t know, or can’t find, the technical, then your best strategy is to write a logical statement and apply case facts. For example, let’s say the case required says this: “CPA, I would like you to discuss the pros and cons of adopting blockchain technology for ABC company.” You may not know anything about blockchain technology and you won’t find much in the Knotia, so your recourse is to write something logical and apply case facts. From my personal life and professional experience, I know blockchain is a decentralized technology that records transactions across many computers so that the record can’t be altered. I’ll convert this piece of knowledge into a full AO answer: Here’s an example:
  • Issue: You would like me to discuss the pros and cons of adopting blockchain technology.
  • Analysis: Pros of blockchain:
    • Once recorded, transactions can’t be altered in blockchain, which increases the reliability of ABC’s records, thus helping to [insert case fact, like meet its new strategic mandate of having reliable records].
    • It enhances the ability to track the origin and movement of goods, given that blockchain provides reliable updates and unaltered records, improving ABC’s inventory management and accountability, which is important given that [insert case fact, like ABC has a new user like an investor].
  • Cons of blockchain:
    • High initial cost and complexity of setting up blockchain technology can strain ABC’s budget and resources, which is undesirable given [insert case fact].
    • Integrating blockchain with existing systems can be difficult and time-consuming, while the management is time constrained given the [insert case fact, like one of key managers resigned.]
  • Recommendation: Based on above qual analysis, I don’t recommend implementing blockchain technology given the costs, integration challenges, and the current time and financial constraints ABC is facing with the [insert case facts, like management turnover or bank loan repayment].
• Always recommend: Provide an overall conclusion regarding the treatment for the specified issue, incorporating case facts and considering the impact on users. As most AOs require a conclusion to obtain a C, allocate your final minutes on an AO to briefly summarize your findings.

Conclusion

Handling new and unfamiliar AOs on the CFE and other CPA Canada exams requires staying calm, using Knotia, and relying on your existing knowledge. This includes following the established format for addressing AOs (ie, CPA Way), your work experience, your general life knowledge and integrating case facts. The goal is to stay calm, aim for RC, and manage your time.

Extra resources

Extra resources are available in Gevorg’s CPA review programs.

Day 1 on the CPA Canada CFE exam is focused on testing your understanding of strategic analysis and applying this technical knowledge on a single case. This case is based on Capstone 1, set a few years in the future, with a new set of strategic options to decide on. All of these strategic options will require a quantitative analysis, some of which you will need to apply a discount rate. But if the Day 1 exam has not provided you with a discount rate, what rate are you supposed to use? Here’s the answer.

Use Capstone 1 rate

If an updated discount rate is not provided on Day 1, you can use the Capstone 1 discount rate. When you do this, you must also add an assumption highlighting where you obtained this amount from (i.e. Capstone 1 case).

It’s not often that an updated rate in not given in Day 1, they usually provide you with a new rate. However, certain inputs, including the discount rate, may not be updated or reiterated in the case and this has happened in past CFEs. This shows the importance of thorough review of the Capstone 1 case before your exam.

Since you will have access to the Capstone 1 case during the exam, you are expected to reference important details from it. To streamline this process and save precious time during the exam, I recommend you create a cheat sheet containing essential information, with page numbers, for quick reference. This includes the discount rate used in Capstone 1. For example, in the NPF Capstone 1 case below, the discount rate was given in one of the Appendices and this can be re-used in the Day 1 exam if a new rate is not given.

Can you use another rate?

Some CPA solutions use the rate from the objectives as the discount rate. Rates from the Financial Statements, such as the bank interest rate, has also been used. These are also acceptable and can be used instead of the Capstone 1 rate. When you use any of these rates, make sure to state them in the assumptions. 

Why do you need the discount rate?

There are several calculations that could require the use of a discount rate. Some of the more common assessments include:

• NPV: This is the most common quants tool where you use a discount rate. You would perform NPV when determining if a project will generate positive value or not. The NPV analysis involves discounting all future cash flows associated with a project or investment back to their present value using a discount rate.
• IRR: This is another important quants tool used in capital budgeting where you would use the discount rate. The Internal Rate of Return (IRR) is the discount rate that makes the NPV of all cash flows from a particular project equal to zero. In other words, it’s the expected annual rate of return that will be earned on a project or investment. You would calculate the IRR and compare to the discount rate. If the IRR exceeds the discount rate, the project is considered worthwhile as it is expected to generate a positive return. If the IRR is less than the discount rate, the project is likely to be rejected.
• Valuation: When valuing a company or a project, one method that can be used is the discounted cash flow (DCF) analysis. In this case, future cash flows are discounted back to their present value using a discount rate to determine the current worth of an asset or investment. However, Day 1 rarely requires a DCF valuation, most of the time it’s multiples based (eg, EBITDA x5).

Conclusion

In summary, when the discount rate for Day 1 is not given, use the Capstone 1 case discount rate, a rate from the Day 1 objectives, or the rate from another appendix (such as Financial Statements or another proposal). All of these methods are acceptable, just make sure you note it in your assumptions.

Extra resources

If you’re struggling with quants, the Day 1 Quants Mastery toolkit is a valuable resource to practice with.

As you’re studying for CPA Canada CFE and PEP exams, outside of the commonly tested ASPE and IFRS topics, it’s also important to know the Public Sector Accounting Standards (PSAS) and the Accounting Standards for Not-for-Profit Organizations (ASNPO), as these are included in the CPA Canada Competency Map.

What’s PSAB?

The Public Sector Accounting Board (PSAB) is a Canadian organization responsible for establishing accounting standards for the government, crown corporations, and other public entities in Canada. Some examples are the federal, provincial, and municipal governments, such as the City of Toronto in Ontario, Canada. The City of Toronto would be required to report its financial statements, cashflows, and operational results following Public Sector Accounting Standards (PSAS).

The PSAB sets the PSAS, it helps to guide financial reporting to provide accountability and transparency to taxpayers and public funds. They are based on the principles of fund accounting, which emphasizes tracking and reporting funds separately for specific purposes or activities.

The PSAB standards are in the CPA Canada Handbook:

Is PSAB tested on CPA exams?

Public Sector Accounting standards are not typically tested on CPA Canada exams, so you shouldn’t spend too much study time here. However, some topics that could theoretically be tested include:

• Introduction to the public sector accounting handbook (para’s: .02, .04-06, .09, .17).
• Fund accounting principals
• Accounting for government activities such as taxes and grants

What’s ASNPO?

ASNPO are the accounting standards specifically for not-for-profit (NPO) organizations in Canada, such as charities, associations, and clubs. NPOs can be organized and operated for social, educational, religious, health, or professional purposes, without the mission of earning a profit. For example, a community health center in a specific geographic location. These standards are developed by the Accounting Standards Board (AcSB), to meet the financial reporting needs of NPOs to provide transparency to stakeholders and donors (which are the key users).

The standards are in Part III of the CPA Canada Handbook:

They address items unique for NPO organizations, including contributions, collections held, and reporting controlled and related entities. Where items aren’t included in this section, you must refer to ASPE standards.

Is NPO tested on CPA exams?

NPOs have been tested previously, especially in Core 1 and CFE Day 3 cases, so it’s important you practice this standard. The ASNPO is also tested in MCQs of the Core 1 Module. Common AOs tested under these standards include:

• 4400 F/S presentation
• 4410 Contributions revenue rec.
• 4420 Contributions receivable
• 4433 Tangible capital assets
• 4434 Intangible capital assets

For information on how to access both of these standards, check out this post where I discuss the CPA Canada Handbook.

Conclusion

In summary, PSAB focuses on establishing accounting standards tailored to public sector entities, like crown corporations, whereas ASNPO focuses on standards related to not-for-profit organizations, like charities. Each set of standards is custom designed to meet the distinct needs of the sectors and users. Both standards can theoretically be tested on the CPA Canada exams, though less likely for PSAS, and they are covered in the CPA Canada Handbook.

Extra resources

Extra resources are available in Gevorg’s review courses.

Update October 2025: New information released

Please see this NEW October 2025 BLOG POST on the deadlines and updates about the 2027 program.

Introduction

 The much-anticipated CPA Canada New Certification program (NCP), initially slated for 2025, has now been pushed back to 2027. This delay is significant, not just for its impact on timelines, but also for what it means for current and prospective CPA Canada students who must make critical decisions about what educational paths to choose.

Understanding the 2027 delay

Recent communication from CPA Ontario and other CPA provincial bodies have confirmed that the launch of the CPA Canada New Certification Program has been postponed to early 2027. This delay comes from financial struggles in CPA Canada, highlighted by layoffs and the withdrawal of Ontario and Quebec. These internal issues are raising concerns with me about the readiness and robustness of the planned new program.

Below is the communication from CPA Ontario on May 3, 2024:

Will there be CFE in the new CPA program?

Last year, CPA Canada said they want to shift away from the traditional three-day Common Final Examination (CFE). Today’s update suggests this will still be the case.

CPA Canada seems to be planning to offer “summative examinations” that incorporate case-based evaluations,  like the current CFE, but segmented into three different parts.

Below is the Draft Model, it’s not the final model, which in my opinion hints on what the new program may look like:

Above draft model, from 2023 presentation I was part of, proposed a four-level structure. Levels 1, 2 and 4 would have summative exams, similar to what CPA Canada noted in the recent update. The third level won’t have a formal exam but rather an assessment of workplace competencies.

If this draft model holds, it will alter the CPA pathway, giving you more flexibility and reducing the pressure of a single, high-stakes exam.

Additionally, the above draft model is similar to how other accounting bodies around the world hold their exams, which is my opinion is what CPA Canada is shifting towards: they want to align more closely with global standards and practices in the accounting profession.

Will the CPA exams be the same in all provinces and territories?

Yes, CPA Canada exams under the new certification program are expected to be the same across all provinces and territories. This is confirmed by CPA Ontario’s update.

This is beneficial for our CPA profession, consistency will help to maintain a standardized level of knowledge and competency among all Canadian CPAs, irrespective of their region.

Can you switch to the new CPA certification program?

Yes, you can switch to the new CPA certification program once it launches. CPA Canada is creating policies to help you move from the current program to the new one. I expect to see CFEs up to 2028, 2029 and maybe more, until all current students finish the current program and new students start the new program.

The update also said that if you transition, you’ll get exemptions so you won’t have to re-do the exams you already passed, you’ll be placed at a higher level in the new 2027 program.

Can you take the new 2027 program if you didn’t pass CFE three times?

There is no information whether you can register into the new program if you didn’t pass PEP or CFE exams three times and you were de-registered. I will update this as I get new information.

Should you wait or take the exams now?

The big question is: should you wait for the new 2027 CPA program or continue with the current CPA pathway? If you have the flexibility to delay your CPA certification, for example you don’t have CPA program expiry deadline or immediate need for the CPA designation, then I recommend to wait. You’ll get the advantage of seeing what the new 2027 program looks like and deciding which one is easier to pass.

However, if you need to get your CPA sooner, or your program expiry is coming up, it’s better to finish under the existing structure now.

Currently, we have many past exam papers to learn from and practice with, while the new program is new and different, so it may be more challenging to pass the new program, rather than the current one, simply due of lack of past exam cases. This makes the current program more advantageous.

Below is the new Competency Map 2.0 structure that will be built into the new program’s examinations.

Conclusion

The CPA Canada New Certification Program is going to be the biggest change since the unification of CA, CGA and CMA legacy designations in 2014. There’s a delay in the program’s start date from 2025 to 2027 and we know that there will be three summative examinations. It’s not clear now whether there will be CFE-like back-to-back exams or separate exams. The exams will be the same across all provinces and territories and current students can switch to the new program without losing their progress.

I recommend to wait if you can, otherwise continue with the current program and use the past exam papers to your advantage, as these won’t be available in the new program since it’s being built ground-up.

As CPA Canada keeps working on these updates, it’s important to stay updated. If you’re working towards becoming a CPA or thinking about starting, make sure to subscribe to my YouTube channel to stay informed about the changes and how they will impact you. 

 

Tackling the Tax AOs is a daunting task due to the volume of technicals. Studying the Income Tax Act (ITA) can be tough because it’s dense and complex, with lots of divisions, sub-divisions, sections and sub-sections. This article will give you tips to study tax and help you prepare for tax competencies in CPA Canada exams.

Use memorization 

Like the CPA Canada Handbook, you will have access to the ITA during your exams, but being able to find specific information quickly will be tough due to exam time constraints and the massive amount of information in the ITA. My recommendation is memorization of specific formulas/calculations for quants and common theoretic items, like what are the pros/cons of incorporating. Some examples of commonly tested quants and theoretic items you should memorize include:

• Tax income/payable – Individual and Corporate (common items added and deducted)
• CCA formula
• Residency rules
• Employee vs Contractor (the tests)
• Salary vs dividends (common pros/cons)
• Sole prop. vs partnership vs corporation (common pros/cons)
• Sale of assets vs shares
• Loss carry fwd and deadlines
• Tax filing and payment deadlines
• Benefits (impact on ‘er and ‘ee)
• Notice of assessment (NoA)/reassessment
• Sales tax (HST/GST/ITC)

You don’t need to give references to specific sections of the ITA in your answers; you’re only expected to answer technically correct. For example, if you’re asked to discuss the tax consequences of a company’s potential perks, like parking permits, club memberships, transit pass, you don’t have to refer to specific ITA sections for each. You can simply give explanation of the implications to the company and the employees. The requirement is that your explanations must be accurate (for example, transit pass payment is deductible as a business expense to the company and they are a taxable benefit to the employee). Giving technically incorrect answers will not get you RC nor C.

Know the Income Tax Act (ITA)

While memorizing helps, we know there are lots of tax rules and criteria. Therefore, you need to  know your way around ITA and incorporate usage of the ITA into your study routine and exam writing. The following sections are frequently tested and you should practice navigating to these sections in Knotia:

• ITA 2(2), ITA 248(1) – Primary definitions
• ITA 114 – Secondary definitions
• ITA 3(1) – Defines the computation of income for tax purposes.
• ITA 9 – Calculation of income from a business or property
• ITA 18(1) – Limitations on deductions from income
• ITA 39(1) – Capital gains/losses
• ITA 118(1) – Personal tax credits.
• ITA 245(2) – General Anti-Avoidance Rule (GAAR)
• ITA 250(1) – Residency
• ITA 150(1.1), ITA 150 (1), ITA 248(1), ITA 165(1) – Filing requirements/deadlines

Capital Cost Allowance (CCA) is also an important section. This is in Schedule II, on the bottom of ITA.

Use the Exam Reference Schedule 

There are several formulas provided to you during both the PEP exams and the CFE. These will save you time from having to memorize or lookup in the ITA. Below is an example of what’s provided on the CFE:

Other information provided in the reference schedule include:

• How to calculate CCA tax shield
• The individual federal income tax rates include the ranges with the corresponding tax rates.
• Common tax credit amounts. Note that the maximum amount allowable is provided.
• The prescribed interest rate (base rates) for the last 3 tax years, split by quarter.
• The maximum CCA rates for selected classes. Note here that common classes are provided, but not all. Also, there is not a description of each class, so you need to find this section in the ITA (see where above).

The full CFE Reference Schedule is available on CPA Canada’s website. I recommend downloading, printing and reviewing the full Reference Schedule from CPA Canada’s website and use it during your studies.

Conclusion

Understanding the commonly tested topics and the structure of the ITA are crucial skills for success in CPA Canada exams. The study strategies I outlined above—strategic memorization of key tax formulas, understanding the pros/cons of common tax decisions, and familiarizing yourself with frequently tested ITA sections—will improve your ability to navigate the dense material efficiently under exam conditions. 

Extra resources

More tips on how to succeed in the Tax elective are available here. Extra tax resources are available at Tax Review.

While you may be familiar with using the CPA Canada Handbook for Financial Reporting issues, Assurance has its own set of standards to refer to, known as the Canadian Auditing Standards (CAS). But do you really need to study these? Let’s get into it.

Level of knowledge

Unlike FR standards, you don’t need to know CAS standards inside and out. Instead, you should know where to find specific standards in Knotia. This applies to Assurance elective and Assurance role writers in CFE Day 2.

For other modules (Core 1, Core 2, other electives, other CFE roles, CFE Day 3), there’s no need to read the CAS standards at all. The reason is that the CAS standards are very technical and these are not tested in-depth in these other modules. The exception is Core 1, you may get theoretic questions on various audit topics in the MCQ portion, however these can studied from the EBook or the EBook summary notes.

So for all modules, except Assurance elective and CFE Day 2 Assurance role, you should study the commonly tested topics from other simplified resources, such as the EBook. These commonly tested topics include: procedures, assertions, audit planning memo, WIR, audit vs review vs compilation, sampling.

How to use CAS

The CAS standards are located in Knotia, below the Accounting standards.

The sections you need to know are:

• Canadian Standards on Quality Management
• Canadian Accounting Standards
• Other Canadian Standards

The Canadian Accounting Standards section is the largest, but all 3 sections are equally important:

Every CAS is made of an introduction, an objective, and a set of definitions, along with application of the requirements pertaining to the subject.

As noted, these are very technical, written in legal language.

I recommend studying these by reading them in conjunction with other study resources, such as the EBook. Your goal is tie the simplified explanations from the EBook to the CAS in Knotia. For example, Chapter 12 “Planning — Assertions and Procedures- Materiality” in the EBook explains that assertions are in paragraph A190 of CAS 315. Using the “Find” function (CTRL + F, or Command F in Mac) in Knotia, we find this:

Another example is Chapter 11 “Planning – Materiality” in the EBook. It explains that CAS 320 does not specify exact percentages, but it indicates that professional judgment should be applied. Using the “Find” function in Knotia, we see it’s in section A2. We can take a screenshot of this section and save to our notes for future reference.

By doing an initial run through before the exam, we get more familiar with the CAS structure and where the important things are.

Referencing CAS

Do you need to give the specific CAS # during the exams? Yes and no. Here’s what I mean.

For commonly tested Assurance AOs, such as audit planning memo, procedures, control weaknesses, you don’t need to put the CAS #. Instead, use the appropriate format (eg. WIR, RAMP).

For uncommon topics, such as special reporting, going concern, fraud, expert opinion, key audit matter, you do need to specify the CAS. You should reference CAS like you would FR standards, for example: “According to CAS 701…”. Note that I put special reporting in this list because it requires referencing the CAS #, but I would not classify it as uncommon topics otherwise because it’s tested often.

Let’s look at a feedback guide as an example. Using CFE Day 2 case TankCo case, this AO is about the bank requesting that TankCo provides a special report audited by an independent public accountant calculating the provisions of the agreement. You can see that the feedback guide specifically requires you to discuss CAS 805 or CSAE 3530, allowing for one other alternative.

Not putting these reports by CAS # and description will result in a lower than C score. Writing just the CAS # and description will not give you C either. You need to both refer to the correct CAS sections and discuss it. You would discuss it by speaking about the bank’s needs/objectives and explaining pros and cons of the reports, incorporating case facts as support.

For a list of all the special reports, check out this blog post.

Conclusion

In summary, if you’re in the Assurance elective or writing the CFE Assurance role, you should study CAS by reading a simplified assurance study resource and linking it to technical CAS standards. You should become familiar with the layout of CAS in Knotia, including where to find key information, how the CAS are structured, and how to navigate through it.

Most of common assurance AOs tested in the CPA Canada exams require you to use formats, rather than CAS, such as the audit planning memo and control deficiencies. For the complex assurance AOs and special reports, you need to know the specific CAS requirements and how to apply them effectively.

Extra resources

Simplified CAS summaries, including special reports, are available at CAS Summaries resource.