(Posted November 2023)
It is important to understand the prevalence of numerical analysis on the CPA Common Final Examination (CFE). In fact, based on history so far, all but one CFE Day 3 case has included quantitative analysis!
This means you need to embrace calculations and understand their purpose. You also need to be able to adapt to those daily differences.
- CFE Day 1 calculations are there to provide insight on major strategic issues.
- CFE Day 2 cases allow for more in-depth testing of your quantitative analysis abilities, especially for the Finance, PM, and Taxation roles.
- CFE Day 3 cases test your calculation efficiency and time management skills.
Calculations will be tested across all six technical competency areas. That means you need to understand the structure and flow of all of the high probability calculations as explained during our CFE Prep course. We have developed skill drills, which are essentially individual assessment opportunities or mini case-based exercises, in a number of the commonly tested technical competency areas to help you practice those commonly tested calculations. This will help ensure that you can apply those quantitative analysis skills in a case setting.
We want you to ACE your quants on the CFE. That means your numerical analysis needs to contain:
- Accuracy
- Clarity
- Efficiency
Accuracy
You do not need perfect calculations to pass the CFE. However, you do need accuracy in your quants. You need to use the correct calculation, you need to use the correct numbers, and you need to use those numbers in the correct way. This will help you create reasonable quantitative analysis.
Clarity
Each year in the CFE Report, the Board of Examiners has repeatedly said candidates simply do not explain their quants well. They do not use case facts to support their assumptions, or they do not show how they got their numbers…AVOID THOSE BAD HABITS! The marker needs to be able to follow your thought process.
Efficiency
Make sure you get well practiced at setting up your quants with sub-total and total formulas so you can finish and conclude quickly when the time pressure is on during the exam.
Also, get familiar with the formulas available to you in the spreadsheet tab of the CPA examination software. You can also find tips and tricks on this website.
Next Steps
As part of your technical review, learn the key components for each commonly tested calculation so that you can assess the information provided in the case and prepare reasonable quantitative analysis in your responses.
As you write, mark, and debrief cases in your preparations to write the CFE, make sure you take the time to debrief your calculations. Ask yourself how you could have made your calculation more accurate? How could you have made your analysis clearer and easier to follow? How could you have been more efficient in your tracking of the numbers in the case and the structure of your quant?
Whether you love calculations or hate them, you will need to prepare quantitative analysis on each day of the CFE. That’s why developing your quantitative analysis skills is critical and we want you to start improving those skills early in the process.