How to Tackle Unknown AOs on the CFE

Picture this: You are writing Day 2 or Day 3 of the CFE. You just systematically completed a standard inventory valuation, worked through a variance analysis, and you are managing your time perfectly. You flip to the next appendix, read the first paragraph, and realize you are being asked for the accounting treatment of a crypto-backed joint venture in deep-sea mining.

Welcome to the “Unknown AO.”

Every year, the Board of Examiners (BOE) includes Assessment Opportunities (AOs) on the CFE that are completely non-routine, obscure, or nowhere to be found in your standard study templates. As a CPA exam coach here at Gevorg CPA, I see our candidates struggle with these issues very often. In the recent release of the May 2025 report, BOE told candidates to prepare better in this area. As part of our review of this most recent BOE report, we are tackling this issue within this article. We will highlight some of the key tactics we teach to handle these unknown AOs.

The Perspective Shift

Why does the BOE do this?

The BOE explicitly includes these unusual AOs because they want to see if you, as a future Canadian CPA, can handle the unknown in a professional environment. The test isn’t just about your technical memory; it’s about applying the CPA Way (Assess → Analyze → Conclude → Communicate) to an accounting scenario you have never encountered before.

They are testing your ability to process the unknown quickly, provide a commercially reasonable response, and move on. Spending 40 minutes hunting through Knotia for the perfect technical answer to one unknown FR AO is like spending three hours perfectly formatting the fonts on a balance sheet while leaving the income statement completely blank. You have robbed precious time from the routine AOs that actually guarantee your pass.

Remember: If it’s weird to you, it’s weird to everyone. You are competing against the curve. The candidate sitting next to you is grappling with this exact same issue. Keep your composure and execute your strategy.

Have a Planned Response

When you encounter the unknown in Financial Reporting, where we see the majority if Unknown AOs, you need to stop and think about the issue first before jumping to find the applicable handbook section. First, consider how to bucket the topic, then guide yourself to apply a framework:

1. Labeling the Unknown: Identification IS Half the Battle

First things first: simply identifying and labeling an AO as “unknown” is half the battle.

The unknown AO trap on the CFE happens when you panic and try to treat a non-routine AO exactly like a routine one. Trying to forcefully fit an obscure, software licensing issue into a standard 5-step IFRS 15 Revenue Recognition template won’t work, and it will certainly burn valuable time that should be spent tackling the rest of the exam. 

True exam confidence doesn’t mean having a photographic memory of the CPA Canada Handbook. Confidence comes from knowing what is not routine. When you read a prompt and recognize that it is highly unusual, validate that professional judgment. Actively labeling it as an “Unknown AO” in your mind stops you from wasting time searching for a perfect template that does not exist.

2. Bucket the Issue

For technical FR AOs where you aren’t clear what it is, what the actual accounting issue is, and therefore what the actual GAAP standard to consider is, the trick is to first avoid panic. Stop and really think about: What IS the thing in question?

If you had to bucket it into a category, or describe it to someone, where does it fit?

• Is it kind of like an asset? Is it a piece of equipment, is it cash, or an investment?
• Is it kind of like a liability? Are you going to owe someone money?
• Is it kind of like an expense? Has someone done work for you, or will you owe someone because of a service?
• Is it kind of like equity? Have you issued shares, or granted an ownership stake?

For example: Imagine the case introduces a complex “government carbon emission credit.” Instead of freezing because you’ve never studied carbon credits, bucket it. The company purchased them, owns them, and will use them to avoid future fines. It holds future economic value, so it is kind of like an asset—specifically, an intangible one.

Thinking about the issue in this way is going to make your Knotia search significantly easier, and will help get you somewhere in terms of answering the “what is this?” question before you apply a formal framework.

3. Apply a Technical Framework

Once you have bucketed the issue, try searching Knotia. Search the specific trigger words right out of the case alongside your new bucket category. Grab the closest criteria you can find, framed with support from your bucketing activity above, and apply it. We say this often to our students, you need to practice desperate Knotia searches as part of your studying. You will quickly learn that searching in Knotia is not as slick as you would like it to be. The more specific and unique your search word is, the more useful the search result. Do not try this for the first time on exam date.

If your search comes up empty and you are completely lost in the Handbook, stop, and default to the three key components of any accounting standard:

• Recognition: When does it go on the books?
• Measurement: How much is it worth?
• Disclosure: What do we tell the users of the financial statements?

4. Bare minimum: Case facts + so what + recommendation

When all else fails, write whatever reasonable accounting logic comes to mind, but you MUST apply case facts from the appendices, and you ALWAYS provide a recommendation.

You can draft the most logical analysis in the world, but if it doesn’t use the specific numbers, quotes, or situations provided in the case, you aren’t scoring points. You need to integrate the case facts (to Assess the situation), structure your logic using handbook criteria or the Big Three (to Analyze the issue), make a definitive journal entry or treatment recommendation (to Conclude), and ensure your advice is clear and actionable for the client (to Communicate). The BOE rewards candidates who make a decision over those who skip the issue. 

Get support at Gevorg CPA

You don’t have to face the CFE curveballs alone, register for a Gevorg CPA CFE Prep program today.

We will help you navigate this exact challenge and much more. From mastering “Unknown AOs” to perfecting your time management and building rock-solid technical frameworks, we provide the grounded, strategic coaching you need to conquer the CFE.

Don’t leave your exam success to chance. Join us today.

The June 2026 CFE cases have now been released. As in the past, CPA has released only the cases, and not the accompanying solutions. Based on the past schedule, we expect the formal solutions to be released later in the year, and after the September 2026 CFE is written.

As our writers came out of the exam rooms across the country, our discussion boards were flooded with their thoughts and emotions about the cases. After a few weeks of suspense we are finally able to open the cases and see for ourselves what our cohort went up against. We’re going to go day by day through the cases and give our thoughts on the exam itself, and also what we think it tells us for the September 2026 CFE.

For those interested, our team will be publishing GCPA Strong Answers for the June 2026 CFE cases — we’ll provide more information and links below.

Overall Impressions of the June 2026 CFE

Overall, what did we think of this exam? First of all, we were very impressed with the quality and complexity of the cases in this sitting. We thought the exams were more intricate than usual, which makes a case much more difficult to write and test, so we thought this was a very well-constructed exam.

Day 1 we thought was mostly fair, but somewhat more challenging than a typical sitting. Anticipating the conclusions of next year’s CPA Canada Board of Examiners’ Report, we suspect a number of candidates will have struggled with the heightened emphasis on big-picture judgment, particularly where the constraints and objectives were more complex, though still realistic. Day 2 was demanding — the AOs were quite complex and there weren’t any real quick wins. The case facts and data also felt messy, which understandably left many students feeling flustered. Day 3, by contrast, was fair — arguably slightly generous. As a reminder, just because an exam felt hard, or was challenging as presented, does not speak to how it will be marked or how many students will pass.

Day 1: The KBC and VTL cases

Day 1 is the strategic case linked to Capstone 1. The June sitting ran two versions: KBC (Karnat Bread Company) and VTL V2 (Viviana’s Trattoria).

We thought KBC was a moderately challenging case, comprising four strategic issues and what we read as two additional issues. The principal challenge was not the individual issues, but the effort demanded by the overall recommendation and the work required to establish a clear strategic direction. This is where we expect to see candidates struggle.

It is also where one of our pre-exam predictions proved accurate. Ahead of each CFE, we forecast the likely direction of the exam and prepare our students accordingly. For June, we predicted that CPA Canada would require candidates to form an overall recommendation in which the governing constraint or objective was not obvious or simple. For example, four strategic issues are presented, one is eliminated on weak quantitative support, three remain feasible, yet only two can be pursued under a genuine financial or capacity constraint. This form of testing has challenged candidates in the past, and our expectation was that CPA Canada would extend it rather than retreat from it. Our review of the case, together with feedback from our students, indicates that this is precisely what occurred.

We thought VTL shared this character. The notable feature here was that most of the available options appeared feasible, or at least not obvious to reject. In our experience, that’s usually much harder for candidates to navigate. In addition to forcing them to truly think, we expect many candidates doubted their analyses and likely panicked because of this. In both of these Day 1 cases, CPA required candidates to follow the CPA Way to reason carefully toward the most defensible strategic direction.

Key Takeaways for Day 1

Be prepared to demonstrate strategic decision-making. Through its Board Reports, CPA Canada has consistently indicated that it expects candidates to demonstrate genuine strategic decision-making. Success on Day 1 can no longer be secured through issue-by-issue technical work alone; a strong framework will not compensate for an overall conclusion that lacks substantive reasoning.

Use a decision matrix. Both cases presented a substantial number of competing objectives (the board’s priorities, the owner’s priorities, and so on), which you were required to track and tie back to your recommendation. We have always taught our students to use a decision matrix to organize their overall conclusion, but in these Day 1 exams it would have been even more critical given the volume of variables students had to keep track of.

Manage your time. Neglecting the overall conclusion is a well-established fatal flaw on a Day 1 case. Given the demands of the overall conclusions in these two cases, candidates should protect their time budget strictly. This means keeping the work required for the individual strategic issues as concise and efficient as possible.

If you need help mastering these strategies, review our guide on how to approach Day 1 here.

June 2026 CFE Day 2 (ETA Case) Analysis

Feedback from our students on the Day 2 case, ETA, was consistent and pointed: it was among the most demanding cases they had encountered. For the most part we would agree with them. It was still a fair exam, but the way the case was presented added some compounding challenges for candidates. It was a rigorous test of comprehension — not merely of technical knowledge, but of your ability to make sense of a complex, realistic case under time pressure.

Two features made ETA particularly demanding:

Dispersal of data. Whereas earlier Day 2 cases tended to consolidate the figures required for a given calculation within a single appendix, ETA distributed them throughout the case. Candidates had to locate and assemble information from multiple points simply to complete individual calculations, placing a significant load on reading comprehension and data organization.

Absence of accessible material. Cases will often provide one or two straightforward issues to build confidence. ETA instead presented three tough Financial Reporting (FR) issues — componentization, an Asset Retirement Obligation (ARO), and a principal-versus-agent revenue determination — each requiring multi-step analysis and detailed application of the Handbook.

As we said earlier, this doesn’t mean more people will fail. The biggest risk we see is the panic we expect it caused candidates. One or two easy AOs are confidence builders and can give candidates the mental strength to continue. Navigating confusing data and challenging topics is likely to cause downstream effects on the quality of case fact integration, conclusions, and more — ultimately putting candidates at risk of failure.

For September, the implication is clear: technical proficiency alone is insufficient without the ability to organize a complex case and manage the emotions of an unsettling one.

Day 3: A fair examination, and a lesson in composure

The June Day 3 cases were fair, with most students expressing some confidence in most of the AOs that were presented. We agreed with that assessment when we did our review.

Our biggest concern for our students after Day 2, and what we did our best to coach them through, was staying positive for Day 3. Our expectation, though we hope to be wrong, is that many candidates will have carried the Day 2 shadow of doubt and panic into Day 3, and performed worse than they typically would have on relatively achievable AOs and cases.

The sequence merits comment. A demanding Day 2 was followed by a fair, arguably generous, Day 3 — and this carries a genuine strategic lesson. A difficult day does not portend a difficult one to follow; frequently the reverse holds. The principal risk in June was not that Day 3 proved hard, but that a discouraging Day 2 might be carried into a Day 3 that was, in fact, highly manageable. You cannot allow a difficult day to compromise a favourable one. Deliberate composure between days is essential.

Implications for the September 2026 CFE

We have not seen the solutions and cannot know how CPA Canada will mark or scale this sitting. However, for candidates writing in September, here is what we think you should be thinking about, given what we can gauge from the June 2026 CFE cases:

Day 1: Treat the overall recommendation as central, allow sufficient time to develop it, and prepare to exercise judgment rather than mechanically process issues.

Day 2: Command the technical mechanics, but also develop the comprehension required to interpret a case efficiently when data is dispersed.

Day 3: Lean into the mental dimension of the exam. Whatever September presents, a deliberate strategy for resetting between days and approaching each with composure is essential.

Practising with the June 2026 cases

At GCPA, we prepare Strong Answers for several past CFE cases; they represent our attempt at writing the exam, as a student would, to prepare a realistic but high-quality response that reflects what a strong student could reasonably produce in the time available. Our students use them to debrief their own writing, as they demonstrate what a passing response genuinely looks like on the page — using the templates and formats we recommend — rather than an idealized answer that few could achieve under exam conditions.

Most students like to practise with the most recently offered exams. For the June 2026 CFE, specifically, we are preparing Day 2 and Day 3 Strong Answers for candidates to leverage in their studying for September 2026. These materials are currently being finalized. We will post the link here as soon as they become available; please check back shortly.

They will be available at the following link:  https://gevorgcpa.com/cfe-cases/

For Day 1 writers, we have the following practice resources specific to your Day 1 Capstone Case:

MEI V2 writers:

• GCPA Strong Answer to the MEI V1 case

(note that formal CPA solutions are not yet available for the MEI V1 case)

• GCPA Sample Case for MEI

(This is an additional practice case and solution for those writing MEI V2 in September to use for practice)

STC writers:

• GCPA Sample Case for STC – available soon and will be posted here 

(This is an additional practice case and solution for those writing STC in September to use for practice)

Frequently Asked Questions About the June 2026 CFE

Was the June 2026 CFE difficult?

Based on our review and feedback from candidates, the June 2026 CFE was challenging, particularly on Day 2. The Day 1 cases required stronger strategic judgment than many previous sittings, while Day 2 demanded a high level of technical knowledge, reading comprehension, and organization. Day 3 was comparatively fair and gave many candidates an opportunity to recover from a difficult second day. We will have to wait until we receive the Board of Examiners Report to see how the exams were ultimately graded.

What were the June 2026 CFE cases?

The June 2026 CFE included two Day 1 cases, KBC (Karnat Bread Company) and VTL (Viviana’s Trattoria), along with Emerald Tours and Air Limited (or ETA), the Day 2 case and the Day 3 multi-case examination. Each case tested different competencies, including strategic analysis, financial reporting, assurance, management accounting, taxation, finance, and overall professional judgment.

Should September 2026 CFE writers practise the June 2026 CFE cases?

Yes. The June 2026 CFE provides valuable insight into the level of complexity and judgment expected by CPA Canada. Practising these cases helps candidates strengthen their technical knowledge, improve time management, and become more comfortable working through realistic case scenarios before writing the September 2026 CFE.

When will the June 2026 CFE solutions be released?

At the time of writing, CPA Canada has released the June 2026 CFE cases but has not yet published the official solutions. Based on previous examination cycles, the formal solutions are typically released by CPA Canada after the September 2026 CFE has been completed.

What can candidates learn from the June 2026 CFE?

One of the biggest lessons from the June 2026 CFE, our interpretation, is that success will require more than technical knowledge. Candidates needed to demonstrate sound professional judgment, manage complex case information efficiently, prioritize their time effectively, and remain composed throughout all three examination days. These skills should continue to be a major focus for anyone preparing for future CFE sittings.

Where can I find practice materials for the June 2026 CFE?

Candidates looking to practise with the June 2026 CFE can begin by reviewing the released CPA Canada cases and comparing their responses against high-quality sample solutions. GCPA is also preparing Strong Answers for the June 2026 CFE to help candidates understand what a well-structured passing response looks like under actual exam conditions. The link to the cases is here.