The road to CFE

The inside story on the Common Final Examination, the tool that will welcome the best and brightest accountants to the CPA fold. Plus a few words from the gold recipients of the first CFE.

Over the course of three days last September, CPA candidates across Canada streamed into 30 auditoriums, gymnasiums and other locations to write the CPA profession’s first Common Final Examination. Each has spent hundreds of hours of intensive preparation in the quest to become a chartered professional accountant. On this particular Wednesday morning — the first day of testing — students from diverse academic backgrounds in English and French Canada enter the testing centres and settle into their seats to spend the next four hours completing the first part of the exam. They will return on Thursday to write for another five hours, then finish on Friday with the final four hours of testing. All in all, they’ll spend 13 intense hours demonstrating the competencies required to merit that coveted designation.

Formal examinations to certify Canadian accountants have been around for more than a century, but the 2015 writing was different — and not only for the participating candidates. Tashia Batstone, CPA Canada’s vice-president of education services, and her team were charged with creating the new exam — the tool that will ultimately be responsible for welcoming the best and brightest accountants to one of the largest national accounting bodies in the world.

It’s been an enormous task. Batstone and her team, supported by a volunteer Board of Examiners (BOE), have invested more than three years developing the Common Final Exam (affectionately referred to as the CFE), which replaces the exam processes of the three pre-unification accounting bodies. “Our approach from the beginning was holistic,” says Batstone. “We began with open minds, building on the strong, unique parts of each of the legacy exams and best practices of similar exams around the world.”


The unification of Canada’s three legacy accounting bodies began in spring 2011. By January 2012, the creation of a new education and certification program was identified as one of eight key requirements. On April 1, 2013, CPA Canada assumed operations of CICA and CMA Canada; CGA-Canada joined in October 2014, completing integration of the three legacy organizations.

Since 2012, the education services team has focused on developing the new program. According to Kevin Dancey, president and CEO of CPA Canada, it’s all about education, examination and experience. “The CPA certification program combines elements that ensure its graduates finish with a strong foundation of knowledge and skill as professional accountants,” he says. “It’s based on the methodical problem-solving approach articulated as the ‘CPA Way.’ When you practise the CPA Way, you learn how to integrate diverse pieces of information, see situations more accurately and apply reasoned judgment.”

Before entering the exam centres, each CFE candidate has met the education requirements of the new CPA certification program, which include an undergraduate degree, specific prerequisite knowledge requirements and the graduate level CPA Professional Education Program (CPA PEP), or an equivalent postsecondary program accredited by the profession. Those with undergraduate degrees outside accounting can meet any missing knowledge requirements through prerequisite modules offered by the profession or through a postsecondary institution. CPA prerequisite modules also provide an efficient bridge to CPA PEP for international students and internationally trained accountants seeking the Canadian CPA designation.

Sandy Hilton, the director of professional education programs at CPA Canada, has overseen the CPA PEP program since its first module launched in an 800-student pilot program in 2013. “CPA PEP is driven by the CPA Competency Map, which was developed with significant input from all types of employers answering the question, ‘What skills and knowledge do new CPAs require to be successful in your organization?’” he says. “It’s a simple but very powerful question that quickly identifies the key, common skills that cross many different types of jobs.”


In November, just 10 days before the final results of the first CFE are sent to the provincial boards for their stamps of approval, Jylan Khalil is between marking centres checking on progress — pass or fail scores are scheduled to be released to candidates in about three weeks. As CPA Canada’s director of evaluation, Khalil is dubbed the department’s “assessment guru.”

Things have changed since 1986 when Khalil started at CICA and worked on the UFE, but she says being part of the creation of the CFE has been the most exciting adventure of her 30-year career. The CFE is as challenging as any of the legacy exams, testing knowledge across the six technical competency areas outlined in the CPA Competency Map as well as a candidate’s ability to think strategically, use professional skills such as skepticism and judgment and demonstrate strong communication skills.

The CPA CFE is created by a task force of subject-matter experts and approved by the profession’s BOE, a voluntary body of 18 members from across Canada who share a passionate commitment to the profession. BOE members are drawn from all legacy bodies and include representatives from academe, industry, government and public practice; their role is to ensure all candidates are treated fairly while upholding the profession’s standards. The inaugural board is chaired by Peter Norwood, chair of the financial management department of Vancouver’s Langara College, and a legacy CA and CMA member.

The CFE is administered over three days, with candidates challenged to demonstrate specific skills in response to various business-case scenarios.

Day one, which has roots in CMA Canada’s legacy exam, focuses on strategic thinking. “It’s based on a case study taken from the Capstone 1 module of the CPA PEP,” Batstone explains. “Candidates are required to draw on their research and the knowledge they’ve gained to address big picture issues.”

The case provided in a mock CFE provides a good example. It involves the fictional Arndt Industries, a company that has expanded to Peru and increased its product offerings to include an eco-friendly locomotive. For exam purposes, candidates are given two years of financial statements, five-year forecasts, pertinent company updates (such as changes to the board of directors) and transcribed minutes from the last board meeting.

They’re asked to assess strategically the risks and opportunities Arndt should consider in the near future, such as whether to go public or allow a private-equity firm to purchase part of the company, and report back to the company. Candidates are judged on professional competencies such as defining the strategic problem and integrating information to investigate viable solutions.

Day two of the CFE shifts focus from top-level strategic thinking to the demonstration of knowledge depth. From an examination design perspective, this was particularly challenging. “The education and experience of CPA candidates is no longer homogeneous,” says Khalil. “They can now gain their practical experience in a variety of backgrounds, both in public practice and in industry, government and not for profits, and have the opportunity to choose career-relevant electives within CPA PEP. We needed to develop an examination methodology that tests all candidates to the same standard, while recognizing this diversity.”

The innovative design of CFE day two meets this challenge. All candidates are provided with the same case — but before the exam they choose the perspective from which they will respond to it. They choose from one of four possible roles — assurance, tax, finance or performance management — aligning with their education, experience and career goals. Those who choose the tax role, for example, might be required to demonstrate depth by calculating taxable income and preparing tax filings for the company, while those in the assurance role might be required to review draft financial statements and prepare a preliminary audit strategy.

“One key requirement was to ensure the four roles are of equal difficulty from an assessment standpoint,” Khalil adds. “CFE candidates all receive the same case, and appendices relevant to their chosen role. The examinations are then marked by teams of experts in each area.”

CFE day three uses several small cases to provide candidates the opportunity to demonstrate the breadth of their competency development. “This is where candidates are tested in all competency areas,” says Batstone. These business scenarios provide the opportunity to test both technical competency and vital “softer skills” — professionalism, responsibility, ability to deal with difficult situations — that candidates should possess.

It also brings ethical issues to the forefront. In one of the cases in the department’s mock exam, for example, a CPA was accidentally copied on an email divulging corrupt behaviour by two company executives. The candidate must address the issue, assessing whether “management decisions align with the entity’s mission, vision and values,” and analyzing the “key operational issues and alignment with strategy.”

In developing the CFE, CPA Canada’s education staff and the BOE faced a number of challenges. The most significant, according to Hilton, was overcoming legacy biases. “Everyone involved had come from one of the three legacy accounting organizations and brought certain ideas with them on what was best. When things don’t work perfectly, we often face a barrage of ‘just go back to the way it was,’” he says. “People don’t like change and that was evident throughout the development process.”

Finding a sufficient number of qualified markers was also challenging. “We now need markers not just for the CFE, but every three months for PEP core and elective exams,” Khalil says. “Our process ensures that quality is always maintained.”


The first CFE went off without a hitch. Khalil, who managed the UFE, says that while it was satisfying to see the UFE through to the end, it was even more exciting to launch the CFE.

Marks were released to candidates on December 4, and successful candidates will take their place in the CPA Canada history books. “This is a historic time for Canada’s accounting profession,” Dancey says. “These individuals who were the first writers of the CFE, and were successful, will be among the first Canadian CPAs with no legacy designation once they have completed their practical experience.”

There are two CFEs scheduled for this year — May and September — and one in September 2017.

“Today’s accountants must create value — not just measure value. Not only does the certification program develop the technical skills associated with the profession, it also provides a solid understanding of performance management, communications and strategy,” says Dancey. “Passing the CFE is a significant personal achievement. It puts you on a career path that can offer a lifetime of rewards.”


The history-making first Common Final Examination gold recipients in their own words:


Erin Compeau 

When you heard you had won the Governor General’s Gold Medal:

“I was initially shocked and then giddily happy! I have been fortunate to have several unique experiences in my life, and this result definitely tops that list.”

In your wildest dreams did you imagine that you could win it?

“My CFE study group talked about making honour roll during the summer, but it always seemed like a fantasy at the time. On the day of the exam, I focused on executing my exam strategy without thinking about the results.”

Why did you decide to become an accountant?

“It was a spontaneous decision during the university application process. I wanted to choose a career in which I could find a larger purpose, growth opportunities and rewards for hard work. I think that I have found all these things in accounting.”


Caleb Aaron Hagemeister 

When you heard you had won the Western Canada Gold Medal:

“We got on the line with one of our Calgary partners, and he said that he was with our forensics and litigation team and was also a volunteer with CPA and asked if I could keep a secret. I was able to muster a yes. Then he told me that I was the regional gold medal winner for Western Canada. I sort of blacked out and don’t really remember much more of what he said, and the waterworks started going too. I wasn’t crying because I had won the gold medal — I was crying because I was so happy that I had passed the exam.”


Mathieu Isabelle

When you heard you had won the Quebec Gold Medal:

“I was pleasantly surprised — I did not expect it at all. I felt a great sense of accomplishment and pride. This gold medal is a wonderful reward for the energy and time I devoted to my studies in recent years.”

In your wildest dreams did you imagine that you could win it?

“When I finished the exam, I was not sure of some answers from Day 3 and I thought my results would be somewhere in the middle. I was far from imagining that I had written an exam deserving the gold medal in Quebec.”


Jisoo Ahn 

When you heard you had won the Atlantic Canada Gold Medal:

“Throughout the CFE summer my CFE mentor kept telling me I would win the gold medal. I never thought I would. All I wanted was a pass. But after Day 3, while reading through the cases I wrote, I got a strong feeling that I nailed it. [When the results came] I could not believe it, so I read the emails hundreds of times to make sure it was true. My heart was beating so fast, and I was so happy I could not say a word. I thought about the support of my family, friends and my firm. Without them, I would not have been able to do it.”