CPA PERT: Here’s MA2 Template and Example

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If you have experience working with budgets or forecasts, you should target MA2 in your CPA Canada PERT reporting. It’s an area that anyone exposed to budgets or forecasts can get at least Level 1, if not Level 2. When I’m helping students pass PERT, I’m surprised how few target this area. It’s structured methodically, doesn’t take much character space, and you automatically get exposure to it during the budget season.

If your role doesn’t include budgets or forecasts, you should chat with your manager. Go into their office or send a Teams message asking if you can assist at the next budget cycle. Getting exposed 1-2 times is enough to get Level 1 if written correctly.

Here’s a breakdown on how to answer MA2 in PERT and a full example.

What’s MA2: Preparing operational/financial budgets, plans and/or forecasts

Every company creates a budget. MA2 is all about that: Preparing budgets (or forecasts) for your company. This includes different types of budgets/forecasts:

  • Operational
  • Master (financial)
  • Project (eg construction project)
  • Flexible
  • Static
  • Cash

The type of budget that I’ve seen most success in getting Level 2 is the operational or master (financial) budget. If your exposure is in project budgeting, you will need to write an additional paragraph explaining how your project budget integrates into the overall financial budget for the year.

There are three parts to the process of creating budgets or forecasts:

  • (1) Preparing inputs
  • (2) Calculating the budget/forecast
  • (3) Performing variance analysis.

These 3 parts form the template for your MA2. Let’s break them down.

1) Preparing inputs

The inputs are the specific items you put in the budget. Examples of inputs:

  • Activities to perform (eg. research, market analysis, development, product launch, staff training, monitoring)
  • Resources required
  • Sales price
  • Cost of materials and labour
  • Monthly expenses
  • Capital expenditure
  • Debt interest
  • Tax rates
  • Employee salaries
  • Various expenses
  • Inventory levels and costs

You need to write that you analyzed inputs for the budget/forecast. Start by picking 2 specific inputs (like the ones above) and write how you analyzed them to see if it makes sense to use them in the budget/forecast. You need to include:

  • 1) Examples of inputs
  • 2) Sources of input (where did you get the input?). Example: ERP, CRM, project manager, department head.
  • 3) Assumptions you made. Example: I considered annual inflation rates and industry-standard salary increases. For sales price, I assumed a steady market demand.
  • 4) Reasonableness (how did you know it’s accurate/reasonable?). Example: I cross-referenced the inputs with internal ERP data and external market reports, and consulted with department heads for reasonableness.

2) Calculating the budget/forecast

Once the inputs are ready, the next step is to prepare the actual budget or forecast. In this step, we want to cover these details:

  • 1) Scope (are you responsible for the entire budget/forecast, or sections?): Example: As my company is large, I’m responsible for specific sections of the budget: the head office and regional distribution centers.
  • 2) Scale (do you prepare for the full company, or operating unit/project?): Example: I prepare for the entire organization.
  • 3) Steps (what exactly do you do?). Example: My task involves collecting, analyzing and evaluating data from various departments (eg. HR, accounting, marketing, sales), assessing reasonableness, adjusting for projected changes, and consolidating this information into the final budget. Specifically, I gather data from internal systems like our ERP and CRM platforms, departmental reports, and my direct communications with department heads. The data is in Excel format. I then analyze this data for trends, reasonableness, and potential changes before inputting into the final budget. This analysis helps in accurately forecasting revenues, expenses, and resource needs. My final step is synthesizing all these into a detailed budget proposal, which is then presented to executives for approval. 

3) Performing variance analysis

The third and final step is to perform a variance analysis. This is done after the budget/forecast is finalized and actual results are in. You need to write 2-3 specific examples of variance analysis you did. Common mistake I see CPA students make here is that they miss the implications of their variance analysis. In this step, we will cover these:

  • 1) Steps (how do you perform variance analysis?)
  • 2) Variance #1
  • Implication
  • 3) Variance #2
  • Implication
  • 4) Variance #3
  • Implication

How much exposure do you need for Level 2?

For a large company, you can be performing budgeting/forecasting for few complex sections. For a smaller and medium-size company, you need to be involved for the majority of the budget/forecast.

Frequency and complexity are important too.  You will need to write what judgement factors you used for evaluation and the frequency (monthly, quarterly, annual). We’ll add this to the bottom of the template.

MA2 template and full example

Below is a template and full example covering MA2. It’s important that you don’t directly copy the example below. This is is against CPA Canada’ s plagiarism policy. Use below as a reference and write your own original example.

1) Inputs: I start the budget preparation and evaluation task by analyzing inputs:

  • Examples of inputs: I analyze sales price (revenue) and wages expense.
  • Sources of input: I gather the inputs from the company ERP, CRM,  and holding meetings with department heads.
  • Assumptions. In my analysis, I considered annual inflation rates and industry-standard salary increases. For sales price, I assumed a steady market demand.
  • Reasonableness: I cross-referenced the inputs with internal ERP data and external market reports, such as economic forecasts by StatsCan, to assess reasonableness. I checked the consistency of these inputs against historical data trends and future forecasts.

2) Calculating budget

  • Scope: As my company is medium-size, I’m responsible for the entire financial budget.
  • Scale: I prepare for the entire organization.
  • Steps: My budget analysis and evaluation task includes collecting and analyzing inputs from various departments (eg. HR, accounting, marketing, sales), adjusting for projected changes, and consolidating this information into a comprehensive budget. I gather inputs from the internal systems (ERP and CRM), departmental reports, and my direct communications with department heads. The data is in Excel format. I use two tabs in Excel: the first has the inputs and the second has the draft budget. I use VLOOKUP and Pivot table to calculate the budget. I analyze inputs for trends, reasonableness, and potential changes, before calculating the draft budget. My analysis helps in accurately forecasting revenues, expenses, and resource needs. My final step is synthesizing all these into a detailed budget proposal, which is then presented to executives for approval. 

3) Variance analysis

  • Steps: Once the actual results are ready, I perform VA by comparing the budgeted figures against the actual. I do my analysis in Excel using formulas such as VLOOKUP, XLOOKUP and Pivot table. I identify and quantify differences to find areas of financial overperformance/underperformance and to adjust future budgets, thus helping the company meet its targets.
  • Variance #1: I evaluated wages expense budget vs actual. I looked at each department’s actual salaries and compared to the budget, considering factors like overtime, new hires, and turnover rates. I found that overall wages were higher than budgeted due to increased overtime in the distribution centers.
  • Implication: I recommended increasing hiring for the next fiscal period. The implications of my analysis on the business are improved cost management, meeting customer delivery targets, and more accurate staffing projections for next FY.
  • Variance #2: I evaluated revenue budget vs actual. I analyzed sales volumes, pricing strategies, and market conditions that impacted our revenue. I found that actual revenues were below budget, mainly due to lower-than-expected sales volumes.
    Implication: I recommended revising pricing strategies and sales targets. The implications of my analysis on business are enhanced revenue forecasting and strategic sales planning, specifically lowing the price of low-performing products for market penetration.
  • Variance #3: I evaluated marketing expense budget vs actual. I compared the budgets of 4 marketing campaigns against the actual spend and the effectiveness of these 4 campaigns. I found that 2 campaigns outperformed in terms of ROI while the other two underperformed.
  • Implication: I recommended reallocating funds to high-performing campaigns next FY. The implications of my analysis on the business are more efficient use of marketing resources and improved ROI on marketing activities.

Frequency: I’ve performed the above budget analysis and evaluation for 2 annual budget cycles.

Complexity: My budget and variance analysis are complex because they required research, interpretation, and judgment. The budgets are complex because they involve multiple departments, variety of expense categories, and the need to balance short-term operational needs with long-term strategic goals. This complexity was higher last year due to dynamic market conditions (high interest rates) and internal company factors, such as layoffs and new ERP system implementation, which required me to update the spreadsheets and the budgeting models to match the new system outputs.

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The above is a level 2 example because it has 2 annual budget cycle exposures and it follows the PERT guidelines as needed. Level 1 example will follow the same format, but it would have less frequency (1 cycle) and lower complexity. The above example is ~4,300 characters, which is within the 5,000 limit.

More PERT templates and examples

Full CPA PERT templates and examples are available at PER Review success program.