Technical update for 2018 CPA PEP examinations and the CFE

Learn about the technical updates that affect the examinable material for CPA PEP examinations and the CFE in 2018.

If you are writing any CPA Professional Education Program (CPA PEP) module examination and/or the Common Final Examination (CFE) in 2018, you should be aware of the technical updates that may not be available in the reference materials found in Securexam, the software used to administer and write examinations. Since reference materials are only updated in Securexam once a year, some material issued after the cut-off date may be examinable for the 2018 examinations.

As specified in the examination blueprints for the CPA PEP modules and the CFE, you are responsible for the standards and regulations that are “in effect as of December 31” (of the prior year):

The versions of the Income Tax Act and the CPA Canada Handbook in the Securexam reference material have a cut-off date of November 30, 2017 for new releases. Therefore, any releases that occur in December typically are not included in the reference material. Normally, this is not an issue as few changes are released in December. However, since changes occurred after November 30, 2017, the Board of Examiners is providing clarification on the testable material for examinations that will be written in 2018.

For the 2018 CPA PEP module examinations and the CFE, you are responsible for standards and legislation as follows:

  • IFRS standards in the CPA Canada Handbook – Accounting that are in effect up to January 1, 2018
  • assurance standards (ASPE, ASNFPO and CAS) in the CPA Canada Handbook – Assurance with an effective date of December 31, 2017, which are included in the November 2017 release (or prior)
  • tax legislation substantively enacted (which includes legislation introduced into the House of Commons) up to November 30, 2017

You are still responsible for changes to the CPA Canada Standards and Guidance Collection that occur after the cut-off date, or that have been issued but are not in effect (for example, IFRS 16 Leases). The changes align with a Level C expectation (move to B at Elective level), based on the following competencies:

  • 1.1.4 explains implications of current trends and emerging issues in financial reporting (IFRS issued but not yet effective fall into 1.1.4).
  • 4.2.2 explains the implications of pending changes in assurance standards.

Note: There are several significant changes to standards, many with an effective date of January 1, 2018. With the stipulated cut-off dates of December 31 (as described above), you would not be responsible for their application on 2018 exams. However, these changes have been publicized for several years, and most educational programs are teaching the material. You are allowed to apply the most current standard on the CPA PEP or CFE examination cases. However, this is not possible with the objective-format questions on the CPA PEP exams, where the effective date must be known.

Further details on accounting and assurance changes

CPA Canada Standards and Guidance Collection

The current CPA Canada Standards and Guidance Collection includes updates up to November 30, 2017, and is dated December 2017.

You are responsible for following exceptions, effective January 1, 2018, on all 2018 examinations:

  1. IFRS 9 Financial Instruments
  2. IFRS 15 Revenue from contracts with customers

The previous standards may not be applied.

Note: IFRS 16 Leases has an effective date of January 2019 and is therefore only testable at an “awareness” level.

Further details on taxation changes

As of November 30, 2017, one bill affecting taxation had been substantively enacted but had not received royal assent. You are expected to apply the changes made by Bill C-63. This bill enacts the second half of the measure in the budget introduced by the government in March 2017; it received royal assent on December 14, 2017.

You are not responsible for the legislation that introduces the government’s proposed measures to restrict income sprinkling, despite its expected retroactive application, since it has not yet been introduced into the House of Commons.

You are advised that the detailed enacted amendments to items found in the Knowledge Supplement are not listed here.

The Securexam version of the Income Tax Act provided will include footnotes that explains this bill.