CFE Day 1: Why Capstone 2 is Not Reliable

As you’re progressing through the CPA Canada’s PEP program, you will eventually enroll into Capstone 2 module.

Capstone 2 module is designed to help you prepare for the Common Final Examination (CFE). It provides past, actual CFE Day 2 and 3 exams, as well as Day 1 mock practice cases. For Day 1, the actual, past exams are not given, because the Day 1 company changes every CFE. Instead, you will get three practice versions that “simulate” your Day 1 exam.

Many students have expressed concerns that the Day 1 practice cases offered in Capstone 2 are not good representations of the actual Day 1 exam. In this post, I will explore these concerns in more detail and give you other study options.

What Day 1 practice cases will I get in Capstone 2?

Capstone 2 provides (3) three practice cases of the Day 1 CFE exam: module workshop version (MW), week 3 (W3) and week 6 (W6). These practice versions are meant to prepare you for your Day 1 exam, similar to how core/elective module practice cases prepared you for those exams.

However, the Capstone 2 Day 1 practice versions do not accurately reflect the real Day 1 exam.

What’s wrong with Capstone 2 Day 1 practice cases?

There are several problems with the Capstone 2 Day 1 practice cases. For example, the way constraints and strategic direction (big picture issues) are handled in the Capstone 2 practice cases is flawed. In the actual Day 1 exam, constraints and strategic direction are supposed to be discussed in all recommendations, including the overall recommendation. Below is a screenshot of the marking rubric, taken from the Day 1 automatic feedback report:

As noted above, the constraints (in this case, the cash flow constraint) must be discussed in all recommendations. However, in the Capstone 2 practice cases, the constraints are not always integrated into the recommendations, which can be confusing for students.

Day 1 exams have recently started testing on strategic direction overarching issue. Missing this can be a fatal flaw in the exam and you may fail. Capstone 2 cases don’t have this overarching issues, which means you’re not getting full preparation for the actual exam.

Below is an example of strategic direction overarching issue from a recent Day 1 exam:

Second example of strategic direction overarching issue:

As you see above, the strategic direction must be discussed in all recommendations.

Spring 2024 update: Starting Spring 2024, the strategic direction required is now part of Capstone 2 practice versions.

What else is wrong with Capstone 2 Day 1 practice cases?

Another concern is that the Capstone 2 Day 1 quantitative analysis are much longer than those that come up in the actual Day 1 exam.  This means you have no real chance of finishing the quants in the Capstone 2 cases, but you can finish them in the Day 1 exam.

Above screenshot is an actual Day 1 exam quants. It’s much shorter than the Capstone 2 version.

Additionally, the situational analysis framework (SAF) provided in the Capstone 2 practice case solutions is very long and includes both Capstone 1 factors and Day 1 factors.

In the actual Day 1 exam, you don’t need to re-write the Capstone 1 and Day 1. You need to simply compare the Capstone 1 and Day 1 changes in a combined analysis. 

Similarly, the Capstone 2 SWOT analysis has an extremely long and detailed list of factors. These factors come from the narrative, dialogue and appendices of the case.

In Day 1, you need to briefly explain the SWOT factors, you don’t need to answer the “so what” in detail as this part is not graded (it’s only graded once you integrate it).

In the real Day 1 exam, the SWOT factors come mostly from the narrative (first 1-2 pages of the exam). There is small input from the board dialogue and rarely from appendices.  We would only add from the appendices if there is an appendix called “Industry update“.

Should you even practice with Capstone 2 Day 1 cases?

Despite these flaws, there are some good aspects to the Capstone 2 Day 1 practice cases. For example, the format in which qualitative points are discussed is a good way for you to write pros/cons during the exam. Though it is long and detailed, you need to write in similar depth during the Day 1 exam.

However, the number of pros and cons provided (“breadth”) in the practice cases is too much, and you should aim to write 3-4 pros and 3-4 cons in the actual Day 1 exam.

Do these flaws apply to every Capstone 2 case (eg Days 2 and 3)?

These flaws apply to only Day 1 practice cases. The Day 2 and Day 3 practice cases in Capstone 2 are the real, past CFE exams, so they are good representations of what may come up in your CFE.

What other resources can I get to learn about Day 1?

If you are looking for more accurate representations of the CFE Day 1 exam, I recommend to seek out supplemental cases from third-party providers. These cases are designed to simulate the actual exam and can provide you with more valuable practice and insights into the types of questions that may be asked.

Conclusion

In conclusion, while the Capstone 2 practice cases provided by CPA Canada are helpful for some aspects of Day 1 preparation, they may not be the most accurate representation of the actual exam. It’s important for you to be aware of the differences between the Capstone 2 Day 1 practice cases and the real Day 1 exam, and seek out additional resources if necessary. With the right preparation, you can increase your chances of success on the Day 1 of the CFE.

Extra resources are available at CFE Review course.