CPA Canada’s Day 1 CFE requires a very different approach than the remaining two CFE days. The layout of the case is based on your Capstone 1 case, with little technical criteria application. Before even starting to assess the strategic issues, you’ll be required to complete a Situational Analysis Framework. Most candidates find difficulty in understanding the detail requirements to completing the situational analysis. Below is a guide to clarify the depth needed when starting your CFE Day 1 response.
Day 1 Situational Analysis
A major component to being successful on Day 1 is to have a strong situational analysis in your answer. You should follow the below format:
- Identify the mission, vision, values of the company and if / how each has changed from Capstone 1.
- Identify any key success factors (KSFs) of the company (typically 4 to 5 is a good rule of thumb).
- Outline any goals and objectives of the company or key stakeholders.
- Identify any constraints (i.e. financial or other) and covenants the company has to comply with.
- Complete an updated external / internal analysis in the form of SWOT analysis (making sure analysis is well-rounded).
- Perform a financial assessment, including a ratio analysis, call out of key financial items and/or YoY financial (i.e. profitability) changes.
You don’t need to memorize the entire Capstone 1 case, but the above key areas need to be studied well because you’ll use them in your CFE Day 1 answer.
Details of Situational Analysis
The situational analysis itself should not take more than 20 minutes, but you do want to complete it fully, because you’ll be linking each of your issues back to the points from it throughout the remainder of the exam.
Most components of the situational analysis can be written in point form. For example, listing the KSF as they appear in the case with no additional explanation is fine. You will notice in the below example of KSF, the points are not explained further with implications, but just written in point form.
As you link back (“integrate”) to some of these points in your strategic issues, they would then be elaborated further with implications.
What about SWOT?
I don’t recommend to explain SWOT. You should write short point form case facts, such as the example below.
Conclusion
Situational analysis is required to successfully pass Day 1 of the CFE, however you don’t need to explain it.
Summary:
| Day 1 SA section | How to format |
| Mission, vision, values | Point form, don’t explain |
| KSFs | Point form, don’t explain |
| Goals/objectives | Point form, don’t explain |
| Constraints | Point form, don’t explain |
| SWOT | Point form, don’t explain |
| Financial assessment | Explain briefly |
Extra Resources
Day 1 pass rates have been falling in the recent CFEs. To help students succeed, I provide templates, extra practice cases, exercises, and live classes to master and pass CFE Day 1. Extra resources are available at the CFE Review.
