CPA Canada CFE Day 2 Sample Questions & Practice Test

CPA Canada CFE Day 2 is the long-case day. Preparation should test role depth, common competency integration, issue prioritization, and recommendations supported by case facts. A compact sample page cannot reproduce the writing task, but it can help you practise the reasoning behind strong case responses.

This page includes 12 original CFE Day 2 sample questions for initial review. They are not official CPA Canada questions and do not reproduce a CFE case.

What CFE Day 2 practice should test

• identifying which issues belong to the selected role and which are common requirements
• prioritizing high-value issues under time pressure
• connecting quantitative work to a recommendation
• explaining assumptions, evidence quality, and residual risk

How to use this CFE Day 2 preview

Use the 12-question set below to practise role-depth judgment in small pieces. It cannot replace long-case writing practice, but it can show whether you are prioritizing role-specific issues, evidence quality, and recommendation support.

Before the sample set, use the CPA Canada CFE Day 2 Cheat Sheet to review role-depth triage, common issue handling, evidence limits, assumptions, time allocation, and conclusion quality.

Sample Exam Questions

Try these 12 original sample questions for CPA Canada CFE Day 2. They are designed for self-assessment and are not taken from the live exam.

Question 1

Topic: role focus

A Day 2 candidate chose the Assurance role. The case includes inventory fraud risk, a valuation decision, and a marketing strategy issue. What should the candidate do?

• A. Prioritize assurance-relevant risks and procedures while addressing required common issues at an appropriate depth
• B. Ignore all common issues because the role is Assurance
• C. Answer only the marketing strategy issue
• D. Treat every issue as equally deep

Best answer: A

Explanation: Day 2 requires role depth plus common competency awareness. The candidate should not ignore common issues, but the role-specific work needs appropriate depth.

Question 2

Topic: issue prioritization

A case includes ten possible issues, but only four are clearly material and decision-relevant. What is the best strategy?

• A. Write one sentence on every possible issue
• B. Spend most time on material, role-relevant, decision-critical issues and avoid overworking low-value points
• C. Skip quantitative analysis entirely
• D. Answer issues in the order they appear, regardless of importance

Best answer: B

Explanation: CFE Day 2 time pressure rewards prioritization. The strongest responses allocate time to issues that matter most to the case and role.

Question 3

Topic: quantitative support

A candidate calculates that a proposed expansion has a positive expected contribution but ignores working-capital needs and capacity constraints. What is missing?

• A. Analysis of whether cash, capacity, and operational constraints affect feasibility
• B. More decimal places
• C. A longer introduction
• D. A conclusion that numbers are never useful

Best answer: A

Explanation: Day 2 quantitative work should support a realistic recommendation. Positive contribution may not be feasible if cash or capacity limits are binding.

Question 4

Topic: evidence quality

Management provides a forecast that supports the preferred option, but the assumptions are not documented. What should the candidate do?

• A. Accept the forecast because management prepared it
• B. Reject the option automatically
• C. Ask for support, test key assumptions, and explain sensitivity or uncertainty
• D. Remove the forecast from the response

Best answer: C

Explanation: Day 2 responses should evaluate evidence quality. Unsupported assumptions may still be usable if caveated and tested, but they should not be accepted blindly.

Question 5

Topic: Assurance role

In an Assurance role, revenue is recognized before delivery and management bonuses depend on revenue. What is the best audit planning response?

• A. Treat revenue as low risk because sales increased
• B. Focus on cutoff, occurrence, collectability, management bias, and targeted procedures
• C. Test only payroll expenses
• D. Ignore bonuses because they are not part of the financial statements

Best answer: B

Explanation: The fact pattern links incentive and revenue recognition. The candidate should identify risk and choose procedures that respond to the assertion.

Question 6

Topic: Finance role

In a Finance role, a client compares two projects using optimistic cash flows only. What is the best improvement?

• A. Use the optimistic case because management prefers it
• B. Choose the larger project automatically
• C. Ignore non-financial risk
• D. Add sensitivity analysis, downside scenarios, financing constraints, and qualitative risk factors

Best answer: D

Explanation: Finance role depth requires assessing uncertainty, not merely computing a single forecast. Sensitivity and financing constraints can change the recommendation.

Question 7

Topic: Taxation role

In a Taxation role, an owner-manager wants to pay a family member for work that has not been performed. What should the candidate identify?

• A. Reasonableness, actual services, documentation, benefit or income-splitting risk, and reporting consequences
• B. Automatic deduction because the corporation pays it
• C. No issue if the family member has a bank account
• D. A marketing issue only

Best answer: A

Explanation: Related-party payments require substance and support. Day 2 role answers should identify tax consequences and documentation risks.

Question 8

Topic: Performance Management role

In a Performance Management role, a new bonus plan rewards production volume, and defect rates rise. What should the candidate recommend?

• A. Keep the bonus plan because volume increased
• B. Remove all incentives forever
• C. Add quality, rework, customer impact, and controllable-cost measures to balance volume
• D. Ignore defects unless customers complain

Best answer: C

Explanation: Performance Management answers should connect measures to behaviour. A volume-only incentive may create quality problems.

Question 9

Topic: integrated common issue

A case includes a going-concern concern that affects financing, reporting, and audit work. What is the best approach?

• A. Treat it only as an audit issue
• B. Treat it only as a finance issue
• C. Address the reporting, cash-flow, disclosure, and assurance implications together
• D. Ignore it if the company has not closed

Best answer: C

Explanation: CFE Day 2 common issues can cross competencies. Going-concern concerns may affect forecasts, disclosures, covenants, and assurance work.

Question 10

Topic: conclusion

A candidate completes detailed analysis but does not state a recommendation. What is the weakness?

• A. Detailed analysis is never useful
• B. Case responses need supported conclusions that answer the user’s decision need
• C. Recommendations should be avoided if there is uncertainty
• D. The issue is only formatting

Best answer: B

Explanation: CFE responses should be decision-useful. Analysis without a conclusion forces the marker or reader to infer the candidate’s recommendation.

Question 11

Topic: time management

Halfway through the case, a candidate is still perfecting one calculation. What is the best adjustment?

• A. Continue until the calculation is perfect
• B. Abandon the case
• C. Write only the final answer with no support
• D. Move to the next material issue, state assumptions, and avoid sacrificing broader coverage

Best answer: D

Explanation: Day 2 rewards broad enough coverage and role depth. Overworking one calculation can harm the overall response.

Question 12

Topic: professional tone

Management’s preferred option is weakly supported. What is the best tone for the candidate’s recommendation?

• A. Dismiss management as careless
• B. Accept management’s option to avoid conflict
• C. State that management is always wrong
• D. Explain the evidence limitations, recommend additional support or a different option, and keep the tone objective

Best answer: D

Explanation: Professional communication should be direct but not inflammatory. A candidate can challenge management’s position by explaining evidence and consequences.

CFE Day 2 answer checklist

Mini Glossary

• Role depth: The deeper competency focus selected for CFE Day 2.
• Common competency: A requirement that may affect all candidates regardless of role.
• Case triage: Prioritizing issues under time pressure.
• Sensitivity analysis: Testing whether a conclusion changes when key assumptions change.

Related CPA Canada routes

• CPA Canada CFE Day 1
• CPA Canada CFE Day 3
• CPA Canada Assurance
• CPA Canada hub

In this section

• CPA Canada CFE Day 2 Cheat Sheet
  Review CPA Canada Common Final Examination Day 2 reminders for role depth, common issues, evidence quality, assumptions, time allocation, and recommendation support.