CPA Canada’s CFE Day 1 is 4 hours long. It contains usually 4 strategic issues, 2 operational issues, and 1 or 2 big picture issues.

Before heading into the exam center, it’s a good idea to have a strategy on how you’re going to approach and solve the Day 1 case. This strategy should be formulated during your prep time and practiced until it becomes second nature.

I described the basics of Day 1 here. So in this blog post, I’ll explain the Day 1 approach that I teach my students.

Day 1 approach

Step 1: Overview the case

First, we flip through all the pages. The goal is to understand what the exam paper is all about:

• How many pages are there?
• How many appendices?
• What are the titles?
• What are the appendices made up of (quant, qual or both)?
• How long is the board dialogue?

This is a quick process that takes 1 minute max.

Step 2: Read narrative, board dialogue and F/S

Now that we know what the case is all about, we read the narrative (first few pages), the board dialogue (which is usually Appendix I) and F/S (if given). All of those are read in detail.

Step 3: Build the outline as you’re reading step 2

You can have either paper or computer outline. Whichever you choose, you should build an outline. It helps to capture the case facts, keep things organized, and saves you from re-reading the case.

Here in step 3, we build the outline. This is done simultaneously as we are doing step 2.

At this point in the approach, you should know all the strategic issues, operational issues, and the big picture issues.

Step 4: Quick read the appendices

Here in step 4, we “quick read” the remaining appendices. The goal is to find what issue each appendix belongs to and if there are any important case facts that might affect all other issues (ie, hidden big picture issues). Don’t read in detail, take 30 sec – 1min max per Appendix.

If any appendices affect SAF (for example, the big picture constraint), then go back to your outline and add the new information to it. This happened in the May 2022 CTI v1 case.

I recommend spending on steps 2, 3 and 4 (combined) 1 hour and 20 minutes.

Step 5: Finalize time budget

It’s time to allocate your remaining time budget and start solving the AOs. Exact time allocation techniques and time budget templates are available in CFE Review.

Step 6: Read appendix in detail & solve

Finally, we read each appendix in detail and solve the AOs.

Summary

Here’s the summary:

• Step 1: Overview the case
• Step 2: Read narrative, board dialogue and F/S
• Step 3: Build the outline as you’re reading in step 2
• Step 4: Quick read appendices
• Step 5: Finalize time budget
• Step 6: Read appendix in detail + solve

Extra resources

Extra resources are available at CFE Review course.

In CPA Canada CFE Day 1, it is typical to have 4 to 5 strategic issues. In some cases, there could be a strategic issue that have multiple options within it. For example, the issue may require you to analyze: keep vs drop, make vs. buy, repair vs replace.

In this article, I’ll discuss the best approach on how to format these issues.

Multiple Options – Quants

For each strategic issue, a quantitative and qualitative analysis is required. The same is true when a strategic issue contains multiple options. Each option will need a corresponding quantitative and qualitative analysis.

For the quantitative component, the following steps should be taken:

• Excel appendix should have a clear title and headers to separate each option.
• In Excel, choose the right technique/calculation approach and find ways to save time on set up. For example, if there are multiple product production options, you can set up your common inputs for each as the rows, and your products as the columns. This will help you avoid duplication of headers for each separate calculation.
• Include short support for calculations.
• Summarize results of each option’s quants in your memo. Include assumptions and other considerations
• Conclude which option is better and why.

At least 2-3 assumptions are needed for each quants you prepare. Be sure to have a balance between the different options if applicable.

Example

Using Creative Toys Inc. (CTI) as an example, the first strategic issue is that the doll head division has low margins, and the board wishes to make this more profitable by automating the manufacturing or outsourcing the production to one of two suppliers. We have 3 options within 1 issue (manufacture, outsource #1, outsource #2).

For the quants, we provide NPV calculation for each scenario and conclude in the memo. The first option is to update the equipment and we write a separate interpretation of the results:

The second and third options are for outsourcing. We write a conclusion for each:

Multiple Options – Qual

For the qualitative component, the following steps should be taken:

• Using bullet form, write 4-5 pros and cons (total) for each option. 
• Ensure there is a balance between pros and cons for each (i.e. not all pros or all cons).
• Integrate AT LEAST 4 situational analysis factors. There should be a balance in linking factors to each of the options within the AO.

Example

Continuing from the earlier example, for the qual, we write pros and cons for new manufacturing equipment vs outsourcing. We would write 4-5 pros/cons for manufacture vs outsource and 4-5 pros/cons of outsource #1 vs outsource #2.

Notice how we combine the pros/cons by writing “Pros of X/Cons of Y”. This is an effective way to cover both options.

Extra resources

Overall, when an AO contains multiple issues, tackle each one as a sub issue with it’s own quantitative and quantitative analysis, and conclusion. Be sure then to create an overall conclusion that considers each of the issues. 

Extra resources are available at CFE Review course.

Update: CPA Canada 2024 pass rates are now available, you can find it at this updated post.

CPA Canada has now released the 2022 PEP and CFE exam pass rates. The 2023 pass rates will be released in February 2024.

2022 CFE Pass Rates

Below are the official exam pass rates as reported by CPA Canada:

CFE Offering	Cumulative Pass Rates
	First Attempt	Second Attempt	Third Attempt
May and September 2022*	71.3%	n/a	n/a
May and September 2021*	73.6%	n/a	n/a
September 2020	75.8%	n/a	n/a
September 2019	76.3%	87.4%	n/a
September 2018	77.6%	87.5%	90.8%
September 2017	77.6%	88.1%	90.6%
September 2016	76.8%	88.6%	91.4%
May 2016	68.7%	75.4%	79.9%
September 2015	82.9%	94.6%	96.6%

*In 2022 and 2021, there were two offerings of the CFE. The 71.3% and 73.6% pass rates are the combined averages of both the May and September CFEs. Overall, there is a decrease of 2-3% year-over-year, with 2022 CFE pass rate of 71.3%.

2022 PEP Pass Rates

CPA PEP Module	2022 Pass Rate	2021 Pass Rate	2020 Pass Rate	2019 Pass Rate
Core 1	74.0%	77.1%	81.9%	79.4%
Core 2	82.5%	85.3%	86.2%	84.3%
Taxation	87.5%	88.1%	88.0%	88.1%
Assurance	89.7%	90.5%	89.1%	89.2%
PM	89.5%	90.9%	90.7%	90.6%
Finance	87.2%	89.1%	89.0%	89.9%

There is a notable decrease in Core 1 pass rate, while other PEP modules decreased by about 1-2% in 2022.

PEP and CFE Exam Coaching

My name is Gevorg. I’m an instructor and CPA exam coach. If you need helping passing your CPA Canada exams, contact me for consultation or check out my courses.

 

 

If you’re a student re-writing the Day 1 exam, you have taken Capstone 2 long time ago,  or you’re an internationally trained accountant who opted not to take Capstone 2, then you will be missing the new feedback guides and the three Day 1 practice cases from Capstone 2.

However, you don’t need to enroll into the full Capstone 2 module to get those. Instead, you can purchase the Capstone 2 review materials separately.

1. How do I get Capstone 2 materials?

Follow the steps below.

Step 1: Contact your local CPA body

Send an email to your local CPA school and request the Capstone 2 review materials. For example, for CPA Ontario, the email is: PEPEnrolment@cpaontario.ca

For CPA Western, here’s the link to the Capstone 2 Review Materials Module (RMM) (bottom of this page):  https://www.cpawsb.ca/current-learners/cpa-pep/modules/

Step 2: Complete forms and pay the fee

Your CPA body will ask you to complete enrollment forms. You’ll receive a similar email to below:

Hello [Candidate],

The cost for the Capstone 2 review materials for $[see below]. This includes access to all of the materials in the module such as the cases, solutions, feedback guides, debriefing videos, flash cards and webinars. Not included is access to the National Marking Centre Hotline or discussion boards, workshop attendance and no feedback on the cases. This enrolment is non-refundable.

To enrol, please complete the attached enrollment form and return with signed copies of the Candidate Training Guide Contract and the Academic Code of Conduct as soon as possible. Access to the materials will be uploaded to D2L within 3-5 business days of the enrolment date. Once we received the requested documents, we will enroll you and our Finance Team will post the invoice for the enrolment fees.

As per CPA Ontario’s website, the fee is currently $250 + HST.

Step 3: Get the materials

They will provide you the new Capstone 2 materials, including the missing Day 1 practice cases (3 versions) and the new feedback guides.

Step 4: Study

Use the feedback guides to understand the CFE case marking scheme.

2. Are there more practice versions for Day 1?

In addition to the three from Capstone 2, you can get supplemental Day 1 exam practice versions. You can also get sample answers to prior year’s versions for extra practice (available if the Day 1 case was previously tested).

Financial Reporting (FR) can be a challenging subject to grasp, and many CPA candidates find it difficult to identify the relevant CPA Canada Handbook section and paragraphs in their exam cases. This blog will guide you through a more straightforward approach to understanding FR references, helping you make the most of your study time and improve your exam performance.

FR sections in the Handbook

To begin, it’s essential to know that the FR standards in the CPA Canada Handbook are divided into the following general sections:

• Definition
• Recognition
• Initial and subsequent measurement
• Disclosure/presentation
• Other sections (eg Appendix A, B)

In some Assessment Opportunities (AOs), we write just the definition, while in other AOs, we write just recognition, and in others, a combination some of the above (for example, definition + recognition + initial measurement).

While applying logic to determine which paragraph to refer to is helpful, it’s not always straightforward. For example, if we have an AO where users are unsure if an asset is Property, Plant, and Equipment (PPE) or inventory, it makes sense to discuss the definitions of both and conclude which one fits better. However, this is a simple example and things can get complicated in the Common Final Examination (CFE) cases.

Understanding triggers is key

For more complex FR AOs, you need to look for triggers. Examples of triggers include:

• Agent: Leads to agent vs. principal section of revenue.
• Lawsuit: Leads to contingency
• Decline in market value: Leads to impairment
• Patent: Leads to intangible assets
• 100% share purchase: Refers to business combination
• Notes receivable: Leads to financial instruments
• Segment: Leads to operating segments

Practice makes perfect

Understanding the connection between triggers and paragraphs is challenging and it’s nearly impossible to learn this by simply reading theory. The key is to write dozens of cases, which will help you learn these trigger-to-section connection over time.

In the beginning, you will get most of them wrong, but that’s okay. As time goes on, you will start to see patterns and identifying the relevant paragraphs will become easier.

Focus on writing cases, take guesses if you’re unsure, learn from the solutions provided and keeping very organized notes.

Conclusion

After practicing several cases (~20-30 cases), it becomes easier to see the connections between triggers and the relevant FR paragraphs. So practice is the key to learning FR and to success in CPA Canada exams.

My FR technical notes show each Handbook standard in point form, divided into sections discussed above. Free preview is available here. Consider adding this resource to your CPA exam studies.

 

Update October 2025: New information released

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

CPA Canada New Certification Program

CFEs to continue to 2027. Please see this new blog post on the update that the CPA Canada New Certification Program is expected to be released in 2027.

Per January 2024 updates, the CFEs may be offered until at least 2026. According to the CFE registration portal and stakeholder update meeting (see screenshots below), CFEs are planned to be offered in 2025, 2026 and 2027 (May and September).

More recent May 2024 update is available here. The program has been postponed to 2027.

I believe this extension was necessary because students enrolled in the current CPA education program need time to complete their certification under the existing program. 

Additionally, according to CPA Canada FAQs, you may be given a choice to transition to the new Certification Program once it’s live. For example, if the new program goes live in 2025, and you’re in your electives, capstones, or the 1st or 2nd attempt of CFE, you may be given a choice to finish under the current program, or transition to the new program. There are no further details at this point, it’s not clear if you’ll need to start the new program from scratch or you’ll be placed at a higher level. It’s also not clear whether students who have not passed CFE 3 times and were de-registered will be allowed to re-enroll into the new program. I will update this post as I get new information.

 

Changes to the CPA Canada education program

If you’re a CPA candidate or an accounting professional, you may have heard of the CPA Canada Competency Map, a document that outlines the technical and enabling competencies required to become a Chartered Professional Accountant (CPA) in Canada. The Competency Map has undergone a massive transformation with the introduction of Competency Map 2.0, a new roadmap for CPAs.

As a result of the implementation of Competency Map 2.0,  the current education program (PREP, PEP, CFE, PERT) will be fully replaced from 2025-2027.

In this post, I’ll take a closer look at Competency Map 2.0, its impact on the CPA education program, and what you can expect if you’re planning to become a CPA in the next few years.

What is Competency Map 2.0?

Competency Map 2.0 is the newest edition of the CPA Canada Competency Map. As a result of the update, the CPA certification program (PREP, PEP, CFE, PERT) will undergo changes from 2025 to 2027. The new program will be called the New Certification Program.

The New Certification Program will focus on specific and foundational competencies, such as diversity, equality, inclusiveness, and indigenous views. The program will be divided into specific, foundational, sub-foundational, and decision-making competencies.

The move towards Competency Map 2.0 and the New Certification Program is driven by CPA Canada’s belief that technical questions can be easily answered using AI, Google and Excel, and that the focus should be on critical thinking skills instead. As a result, the new program will feature complex cases instead of multiple-choice questions (MCQs) and potentially introduce other ways of testing, such as interviews, group projects, and presentations.

What are the New Certification Program changes?

Competency Map 2.0 will bring a number of significant changes to the CPA education program. Here are the most notable changes:

• No more CFEs: From 2025 to 2027, the entire CPA education program is planned to be replaced, and there may be no more Common Final Examinations (CFEs) as we know it. Instead, the new program will be designed from the ground up. CFEs may be continued to be offered beyond 2025 until all current students finish their certification, however new students will be placed into the new certification program.
• No more PREP, PEP, electives: The concept of studying PREP then PEP, and choosing electives, will disappear.
• New PERT: With the high volume of complaints against PERT, it will be removed and replaced by a new experience reporting system.
• Micro-credentials: The new program may introduce micro-credentials, allowing candidates to earn mini-certificates as they advance through different levels of the program.
• Focus on critical thinking: The new program will focus more on critical thinking skills and less on technical knowledge. Technical and enabling competencies will be replaced by new competencies.
• New ways of testing: There may be other methods of testing, such as interviews, group projects, and presentations.

What can you expect?

If you’re a CPA candidate, or planning to become one, you may have questions about what to expect from Competency Map 2.0. Here are some things to keep in mind:

• Legacy path: If you’re already in the CPA program or planning to write the CFE in 2025, there will be a legacy path to help you complete the program using the current CFE exam. More info on CPA Canada’s website here.
• Switching programs: If you’re already in the CPA PREP or PEP programs, you may be thinking of waiting and switching to the new program. This policy is still under development and I will update this post as I get information whether this will be allowed.
• Glitches and bugs: As with any major change, there may be glitches and bugs in the new program. It may be a good idea to wait for a few months or a year before starting the new program to allow other students to go through it first and identify any issues.
• Input: CPA Canada is seeking feedback from stakeholders, including educators and employers, on what the new program should look like. If you have suggestions, feel free to provide your input to me and I’ll send those to them on your behalf.

It’s important to note that the new program is being build from ground up and there will be several feedback sessions. No one knows what the new education program will look like. Though unlikely, we may still have a three-day final examination if stakeholders ask to keep it. The new program will undergo several iterations before it’s finalized.

Conclusion

The New Certification Program is a the biggest change to the CPA education program since the unification of CA, CGA and CMA legacy designations in 2014. The new program will focus on specific competencies, potentially introduce micro-credentials, and feature complex cases and other ways of testing. While there are many unknowns, CPA Canada is seeking input from stakeholders, and legacy paths will be available for current CPA candidates.

If you’re planning to become a CPA, it may be a good idea to subscribe to my YouTube channel to stay informed about the changes and how they will impact you. 

 

Prior to answering the strategic and operational issues on CFE Day 1, you are required to complete a Situational Analysis (SA). This will include assessing the company’s current mission / vision / values, key success factors (KSFs), goals / objectives, internal and external environment (SWOT),  constraints, and a financial analysis.

This will be key to recommending what the company should do, as you will be required to integrate these SA factors throughout each of the strategic and operational issues.

Rules with integrating Situational Analyses factors

Let’s first understand the concept of integration in CFE Day 1. Integration is about taking a factor you put in SA and using it in the strategic and operational analysis. For example, if you write in your SA that a company’s strength is its brand appeal to the millennial customers, then when a strategic issue comes up about launching a new product line, you should tie back, or “integrate” to SA. You’d write:

“This product line is well-accepted by the millennials according to the research, which means our company can leverage its strength of brand appeal to millennials to gain a significant market share, thus improving the bottom line.” In this example, I integrated one of SWOT’s strength factors into the analysis. You’re expected to integrate at every issue (strategic and operational), at least 4-5 times, at minimum.

Some rules about integration:

• You are not required to integrate every single point in the SA throughout your case. You can write something in SA but not integrate.
• You cannot integrate something that you didn’t write in your SA. For example, if the case has some opportunities that you didn’t write in your SA, you can’t integrate it.
• You can integrate the same item more than once.
• There is no need to remove items from your SA that you didn’t integrate. For example, when first completing SA, you won’t know which points are important and which won’t be integrated. It’s possible that you will find later that something you wrote in SA (e.g. some of KSF) are not needed later. There is no need to remove those.
• You can integrate both quant and qual SA items. For example, you can choose to integrate a constraint (i.e. bank covenant) or KSF, and they will both earn you points. 
• You should integrate 4-5 times in all strategic issues

Generally, it’s better to add more points to SA to give you more integration options later. However, be mindful of your time and don’t spend too much time on SA.

How is CFE Day 1 marked?

Below is the Feedback Guide (FG) on the Day 1 SA and how you will be marked. For this example, the case has 4 strategic issues (AO2 to AO5) and 2 operational issues (AO6 A and AO6 B).

To achieve “Yes” on strategic and operational issues (elements 1-4), you will be required to score a Level 3. Level 3 consists of incorporating and discussing 3 factors from your SA. To receive marks for “discussion”, you must clearly explain the implication and impact of the SA factor and why it’s important. You must state why and how it works in favor of the decision, or against it.

Notice how beyond integrating your SA in your analysis, there is also a requirement to integrate the quantitative analysis (element 6). This can include ratio analysis, YoY comparison, industry benchmark comparison, etc. It is not enough to state the amounts in your SA. To achieve “Yes” and a Level 3 in element 6, you must discuss 3 of the quant components in strategic and operational issues and how they impact / affect the overall health or position of the company.

Overall, to achieve “Yes” on your SA, you need to achieve a Level 3 on at least 3 of the elements and at least 1 partial (Level 1 and/or 2) on another.

Extra Resources

In conclusion, completing situational analysis is important before answering the strategic and operational issues on CFE Day 1. Integrating the SA throughout the analysis is essential, and to receive marks for “discussed”, the impact of the situational analysis factor must be clearly explained.

Get extra CFE practice cases and exam coaching here.

 

Are you preparing for the assurance portion of the CPA Canada PEP and CFE exams and wondering whether you need to write “According to CAS” when answering audit AOs? The answer is, it depends on the type of AO you’re dealing with.

Do you need to write “According to CAS…”?

For the common assurance AOs, such as audit planning memo, procedures, control deficiencies, you don’t need to put the CAS standard or mention “According to CAS…” Instead, you can answer based on a format (for example, RAMP, RAP, WIR format).

For non-routine, uncommon AOs, you should write the CAS standard. Examples are key audit matters, fraud, going concern, communication with the auditor, physical matter paragraphs, etc., for these you should write relevant CAS standard.

Another exception is special engagement reports, which I consider a “common” AO. Although it’s common and routine, it still requires writing CAS standards. You must include the CAS number to identify the special report. Examples of special reports are CAS 805, CSAE 3531/3530, CSRS 4400 etc. You can find a full list of special reports here.

How do I study CAS standards?

If you want to fully prepare for assurance AOs and understand CAS standards inside out, a good study strategy is to study them directly. Unfortunately, the Learning eBooks doesn’t divide its chapters per CAS standard, but you can use CAS Summary notes to help you. These notes summarize all relevant CAS standards, including special reports, like CSAE 3531/3530, CSRS 4400. Additionally, review procedures are available in case you get a review planning memo, which comes up in the Assurance and CFE exams.

Extra Resources

In conclusion, when answering audit AOs, it’s not always necessary to write “According to CAS…” However, you should always include the relevant CAS standard for special reports and non-routine audit issues. By studying CAS standards directly, you can ensure that you’re fully prepared for these types of uncommon AOs.

You can get my CPA Canada exam resources here.

 

Are you planning to take the CFE exam? If yes, then you might be wondering whether you should write the old UFE cases that you’ll gain access to once you start Capstone 2. If you’re not familiar with UFEs, let me give you a brief background.

What’s UFE?

The UFE (Uniform Evaluation) used to be the final examination for Chartered Accountants (CA) in Canada. In 2015, the three designations (CA, CGA, and CMA) merged to form the Chartered Professional Accountant (CPA) designation, and the UFE was replaced with the new CFE exam.

Now, the question is, should you write the UFE cases once you have access to them during Capstone 2? The answer depends on whether you’re a first-time CFE writer or an experienced writer.

Should you practice UFE?

If you’re a first-time CFE writer, then there’s no point in writing UFE cases. You’ll have so many CFE cases to deal with that you won’t have enough time to write UFEs alongside them. Instead, focus on the CFE cases and supplemental cases that are relevant to your current exam.

However, if you’re an experienced CFE writer, then I recommend writing some UFE cases as a technical review. I suggest allocating them at the beginning of your studies, before you start writing all the CFEs and supplemental cases. UFE cases will help you review technical areas, such as MA, Finance, and S&G, which do not change over time.

It’s important to note that UFE cases are quite different from CFEs in terms of finding requireds and solving the AOs. Additionally, some of the technicals, like Tax, are outdated. Therefore, use UFEs mainly for technical review and not to simulate the exam experience.

Which UFEs should you write?

Here’s a list of UFE cases that I personally recommend. You can start with these, and if you have more time, you can expand and write even more of the UFEs.

Day 2:

• Kinfolk Limited
• HandySide

Day 3:

• Bold Spice Ltd
• PonyUp
• Carl Carlson
• RWD
• Long Haul Trucking Inc
• Hemp Co
• Browns
• Get-a-Deal
• Bruin Car Parts
• Molly-Sue Brews
• Rent-a-Bike
• Fire in the Sky Inc.
• Digital Future Technologies
• Chinook Trailers Limited

Extra Resources

In conclusion, for most people, there’s no need to write UFEs since they’re outdated. However, if you’re an experienced writer and have already gone through all CFEs in one round, writing UFEs can be useful for technical review. Just remember to treat them as a review, not as a simulation of the actual exam.

You can get extra CFE practice cases and exam resources here.

 

Like Capstone 1, in CFE Day 1 you’ll be required to assess and provide recommendations on several strategic issues and operational issues. You will be expected to prepare a Situational Analysis (SA) that covers the company’s mission/vision/values, KSFs, constraints, quants, objectives and internal/external analysis (SWOT). You can read about the basics of CFE Day 1 here.

SA provides the foundation for your qualitative analysis of the strategic and operational issues. Most candidates find it easiest to integrate and refer to SWOT component of their SA.

Does Day 1 SWOT come from Day 1 or Capstone 1?

The key for Day 1 is to focus on the items that have changed from Capstone 1. Therefore, ~80%/90% of your SWOT should come from new information provided to you in new Day 1 case.

During Day 1 exam, the prior factors, such as economical environment, competition, regulations etc. will be replaced by current information. If you are provided with new information, there is a reason it’s there, and these should be added to your SWOT.

However, you will find that ~10%/20% of your Capstone 1 SWOT points are still relevant and can still be included in your Day 1 SWOT.

Let’s look at an example using a recent Capstone 1 case called Waste Disposal Inc. (WDI).

In Capstone 1, a key strength was the experienced management team (see first image below). This still would be applicable on Day 1 as owners are still actively managing. But notice how there are more items from Day 1, such as changed government regulations, competitive position and the consulting division (see second image below). These new factors are more relevant now and must be added to your SWOT.

Capstone 1:

Day 1:

So while you should be familiar with Capstone 1’s SWOT analysis, it’s not the primary focus for Day 1. Therefore, you can include a limited amount of Capstone 1 points to SWOT.

Make 80-90% of your Day 1 SWOT based on new Day 1 factors, and 10-20% based on Capstone 1. 

For more information on the Day 1 Situational Analysis, check out the following article.

Extra resources

Mastering Day 1 SWOT takes time and practice. Studying diligently and consistently is essential to passing CFE and achieving academic success, so stay focused, set clear goals, and prioritize your learning to achieve results. You can get extra CFE practice cases and exam resources here.