CPA Canada Core 2: Your Complete Guide

In this article, we’ll dive deep into CPA Canada’s Core 2 module. We’ll cover all major aspects: format, assignments, topics, exams, how it’s assessed, and of course, study tips to help you pass. 

Related readings:

What’s Core 2?

Core 2 is the second of six modules in the CPA Canada Professional Education Program (PEP) that will lead you to the Common Final Exam (CFE). Completing the core modules (Core 1 and Core 2) is required before you can choose your elective modules, complete the capstones, and sit in the CFE. Though you can take Core 2 at the same time as Core 1, most students complete Core 1 before writing Core 2. 

The technical topics covered in Core 2 are mostly Management Accounting (MA), Strategy and Governance (SG) and Finance (FN). Of these, MA is the biggest part of the module and the exam.

Examples of MA topics include:

  • Contribution margin (CM) analysis
  • Break-even point (BEP)
  • Variances analysis (VA)
  • Sensitivity analysis (SA)
  • Transfer pricing (TP)
  • Activity-based costing (ABC)
  • Budgeting

As you notice, I use lots of abbreviations when I  write technicals. This is a good study hack. Abbreviating long phrases, like break-even point or contribution margin, helps to keep study notes concise and easier on the eyes.

Similar to Core 1, the Core 2 module is held in online format, with all assignments, readings and quizzes taken on the website Desire 2 Learn (D2L). You’ll get access to D2L a week before the Core 2 start date.

How long is it?

The Core 2 module is designed to be completed in 8 weeks, which is the traditional route most students take. However, an extended version is available, allowing you to complete the module over a 5 -month period. This is good for students who have commitments or those who prefer a slower pace of study.

You can also challenge Core 2, where you skip the entire module and just take the exam. This is allowed only in special circumstances, such as for internationally trained accountants under MRA/MOU.

There’s also an expedited option to complete Core 2, known as fast-track. In this format, you take both Core 1 and Core 2 together. This is the quickest route to completion of the CPA PEP program. However, I suggest fast-track only for those who are not working. The intensity and volume of the coursework are too challenging to manage with full-time or part-time jobs and Core 1 and 2 together.

Also, if you take Core 1 module, but don’t pass the exam, you can take Core 2 and re-attempt Core 1 at the same time. This is also not recommended unless you feel very comfortable with Core 2 technicals. You’re risking to fail both of them since you’ll have too many things to study; it’s better to take one module at a time.

Is there an instructor?

When you enroll into Core 2, you’ll be assigned an online facilitator. Their job is to help you via email, provide feedback on assignments, assist in finding information, and moderate the forums. Since Core 2 is online, you will not meet your facilitator in person.

Core 2 also has Module Workshop (MWS). This compulsory two-day event has presentations and activities by a session leader. The activities cover a wide range of topics, including review of technicals and case writing. I previously worked as a session leader with CPA Canada.

Before attending the workshop, you must complete and submit pre-work to D2L dropbox.

What are the assignments?

Core 2 has weekly assignments that consist of:

  • Multiple-choice questions (MCQs)
  • Integrative problems (IPs)
  • Practice cases (PCs)

MCQs are small problem-based questions that test on technicals.

Below is an example of a Core 2 MCQ:

The IPs are short-answer assignments that test the technical material learned in the weekly unit.

Below is an example of Core 2 IP:

The PCs are 60-minute cases designed to simulate the actual Core 2 module exam.

Below is an example of Core 2 PC:

Majority of students find the Core 2 exam to be harder than the PCs, so I suggest practicing with retired exam cases (discussed below) and mock exam simulations.

The IPs and PCs are to be completed using Microsoft Word and Excel, and uploaded to D2L weekly. The deadline is typically Friday night. Your facilitator will personally mark and provide you with feedback a few days after submission. Feedback is provided in the form of an Excel file, referred to as the Feedback Guide (FG), which will show you how you scored in each assessment. Solutions will automatically be provided to you upon submission. If an assignment is not submitted, the solutions will be released after the deadline.  

Below is an example of a Core 2 FG:

Each row in the feedback guide is graded as:

  • No (N): You didn’t attempt the element (Note: Each element in FG is known as MPI, which stands for minimum proficiency indicator) .
  • Partially (P): You attempted the element to some degree.
  • Yes (Y): You fully achieved the element as needed.

The MCQs are marked automatically by the system.

You will also be provided with retired exam cases (actual cases from past module exams). These are optional but I recommend to practice them under time-constraint to see how ready you are for the final exam.

You are also provided with data analytics activities. There are optional and include solutions and FGs. Since the CPA Canada Competency Map now includes data analytics and information services (DAIS), I recommend completing these exercises, because you can get DAIS topics on your exam.

How is it graded?

Similar to Core 1, the Core 2 IPs and PCs are made up of assessment opportunities (AOs). Grades are provided individually by AO and will be ranked as one of the following:

  • Competent with distinction (CD): More than what’s needed, lots of details written.
  • Competent (C): Well-balanced answer, in both quantitative and qualitative. This is what you’re striving for.
  • Reaching competent (RC): Missing some critical points, not enough to get full marks
  • Nominal competence (NC): You tried but it was incorrect or missed lots of case facts.
  • Not addressed (NA): You missed the AO completely. Usually when you are out of time or don’t catch it.

Your target grade for an AO is a C. The PCs have 5 AOs and the IPs will range from 3 to 6 AOs. The actual Core 2 exam will have 5 AOs.

The RC/C scores in IPs and PCs give you certain number of points. To be eligible to write the exam (discussed below), you need to get at least 75% total grade from your weekly assignments. The course is weighed as follows:

  • IPs: 30%
  • PCs: 30%
  • Unit quizzes and MWS pre-work: 30%
  • MWS participation: 10%

You should not worry about getting this 75% threshold. Most student reach the 75% mark and get to write the exam; the real challenge is passing the exam.

What’s module syllabus?

The syllabus lists the weekly readings and assignments. You can use the syllabus as a checklist and narrow down topics to study. To download the syllabus, click here.

What are the exams?

There is only one final exam at the end of Core 2. The exam is 4 hours and consists of 75 MCQs and one 60-minute case. Some students write the 75 MCQs first then tackle the case, others write the case then answer the MCQs. I recommend that you start with the case.

The Core 2 MCQs are extremely hard. Most students don’t pass Core 2 due to MCQs. It’s very important that you complete all core-level MA, SG and Finance MCQs in D2L during your studies.

Below is the exam blueprint that shows the weighing of the 4 technical competencies tested in Core 2 MCQs:

As you can see, Management Accounting is the biggest subject. I recommend that you spend most of your study time on MA.

Beware that the exam is not based on the syllabus, it’s based on the CPA Canada Competency Map. So there will be topics tested in the exam that you didn’t see in the syllabus, PCs, and IPs. You should expect to see surprises.

How many tries do I get?

You have 3 attempts to pass Core 2. If you don’t pass in your first try,  you can challenge the next exam without taking the entire module again. If you don’t pass in your second try, you’ll need to re-take the entire module for 3rd and final attempt. If you don’t pass in your third attempt, you’ll be de-registered from the PEP program. At that point, you can re-register and start from Core 1 again. Another option would be to take the PEP courses through a university and skip Core 1 and Core 2 altogether. You can read more about it here.

What are the textbooks?

Each study unit in the Core 2 syllabus covers chapters in the Learning eBooks. The Learning eBooks are PDF textbooks given to you by CPA Canada when you register for Core 2. The eBook chapters provide e-lessons, technical drills, examples,  summary problems and so on. While it may not be possible for you to study each eBook chapter, prioritize the subjects you see more frequently on cases, such as break-even analysis. Here is more information on how to download the CPA Canada Learning eBooks.

You don’t get access to the eBook during the exam, but you get a “cheat sheet”, with a list of common ratios and a few other formulas. Most formulas you need for Core 2 are not on that cheat sheet. I suggest that you build it yourself as you study. Note that can’t take your cheat sheet to the exam, it will be used for your studies.

Below is an example of how to build a cheat sheet / study notes for Core 2. Create an Excel file with tabs for each topic. When you come across a topic in your assignments, copy the format of how it was solved. At the end of your studies, you’ll have a master workbook with all major topics, testing scenarios, and how it was solved.

What should I study?

As you saw in the blueprint, MA is the biggest portion.  I suggest spending most of your time studying the MA area.

The exam’s case portion will mainly test on MA, and 1 or 2 other areas (eg. S&G or Finance). For example, your exam case may have 3 MA AOs (eg. BEP, CM, VA), 1 S&G AO (eg. key performance indicators) and 1 Finance AO (eg. NPV). Or it may have 4 MA AOs (eg. BEP, CM, VA, SA) and 1 Finance AO (eg. WACC). This changes every semester and I can provide you tips and estimates on what I think will come up in my Core 2 success program.

For the MCQ portion, MA is again the most weighted subject. As mentioned, Core 2 MCQs are extremely long and hard. I suggest that you practice all D2L MCQs in MA, SG, and Finance. Don’t study Assurance or Tax, these are not tested in Core 2 at all.

What’s the Core 2 pass rate?

The Core 2 pass rate is around 83%. 

Why do students fail Core 2?

Interestingly, more students pass Core 2 than Core 1, but if you ask around, everyone will say Core 2 was harder. Here are the top reasons:

About 50-70% of the exam is MA. Most students struggle with MA, because it’s challenging to think about the problem and solve in Excel in the short amount of time. Having weak MA and no formatting templates in mind are key factors why candidates fail Core 2.

Unlike Core 1, which is “theory” based, Core 2 is all about calculations. This means it’s not possible to pass Core 2 by just doing readings from EBook. Instead, work on your quantitative analysis skills by practicing as many Core 2 MCQs and cases as possible. With each attempt, you will learn a new MA formula and how it was solved.

Core 2 exams are also very time-constrained. As I noted earlier, Core 2 MCQs are long and time consuming. I suggest during the exam to take educated guesses on some long MCQs. Students who passed Core 2 tell me that they guessed on 20-25% of MCQs (1 of every 5), so you’re expected to take some guesses.

Lastly, Core 2 is a self-lead course, which means you are responsible for managing your time, planning your readings, and understanding the material.

Overall, weak MA skills, not having enough time to study, and time management are the biggest reasons students fail.

Do I need a tutor?

Hiring a tutor is a personal preference and it depends on your circumstances. A CPA tutor brings their expertise, helping to identify your weaknesses, reinforce your strengths, teach complex topics, reveal what topics are most tested, thus helping you speed up your study time and increase your chances of passing the exam.

If you attempt Core 2 by yourself and don’t pass it, I suggest that you consider getting a tutor. But if you are successful, then you can keep doing what works for you.

Extra resources

Extra Core 2 resources are available at Core 2 Lessons course.