your performance analysis report 2016 common final ...€¦ · your performance analysis report...

YOUR PERFORMANCE ANALYSIS REPORT2016 Common Final Examination (CFE)

DAY 2 AND DAY 3

Candidate Number

Enclosed is your performance analysis report for the September 2016 Common Final Examination (CFE). This report analyzes your performance on Day 2 and Day 3 only. Day 1 is reported onseparately.

Section A of the report contains an analysis by assessment opportunity (AO) of your performance foreach simulation. Section B contains a detailed analysis of your performance by competency area, and Section C contains a summary of the reviewers’ general findings and an analysis of your performanceby essential CPA enabling skills, following the CPA Way.

This report is intended to highlight areas in need of improvement, not just to explain why you failed theexamination. Where the reviewers were able to, they provided recommendations for improvements,whether or not you met the passing profile requirements set by the Board of Examiners for the variouslevels of the fair pass model. This means that you may have received several comments on an areawhere you met (but barely) the minimum standard.

You are encouraged to read this report in conjunction with your transcript and the Board of Examiners’Report on the September 2016 CFE.

Section A: Assessment By Simulation

Section A reports the reviewers’ findings by AO for each of the Day 2 and Day 3 simulations. Thechecklist is designed to help you identify which of the commonly exhibited weaknesses displayed by thecandidate population you personally exhibited while writing each simulation. This information allows youto see where you missed a mission-critical AO completely or where you fell short of the entry-levelrequirements.

To help you understand which of the weaknesses you, in particular, exhibited, reviewers have markedXs in the relevant boxes. If you did not address an AO at all, the box labelled “You did not address thisassessment opportunity” will be marked with an X. If you addressed the AO and did not demonstrateany of the weaknesses listed, the boxes will be blank. If you did demonstrate a weakness, the box nextto the weakness will be marked with an X and a comment will be included.

Section B: Assessment By Competency Area

The information in Section B is a re-sorting, first by technical competency area, and then by CPAenabling skill, of the weaknesses noted in Section A. The information presented in Section B allows youto identify whether you exhibited more technical weakness in one area than another.

Keep in mind that the checklist of points under each AO in Section A is made up of the tendenciesexhibited by the candidate population based on the Board of Examiners’ expectations for a competentresponse. By focusing on the areas in which there are several Xs, and by examining the reviewers’comments by competency area rather than by simulation, you will be able to identify which technicalelements of a “competent” response you were lacking. Seeing the AO-by-AO weaknesses sorted bycompetency area will allow you to gain a better understanding of which technical area was weakest andthe nature of the errors that contributed to the standing you received.

Beside each box, you will notice a “skill” description. This skill represents the sorting category that isused to present the reviewers’ findings by the enabling skills portion of Section C of your report.

2016 Common Final Examination (CFE)- Day 2 and Day 3

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The CPA Enabling Skills sub-section is a re-sorting of the reviewers’ specific AO-by-AO comments fromSection A by CPA enabling skills grouping (following the CPA Way). Each grouping is clearly defined sothat you know in which of the essential CPA enabling skills that underlie a professional response yourequire further development. The groupings used consist of the following:

Assess the Situation

Define the issues correctly1.Identify any underlying issues2.Rank the issues (i.e., identify the mission-critical issues)3.

1.

Analyze Major Issue(s) - Qualitative

Technical (applies CPA Handbook or Tax Act correctly, uses correct techniques i.e. cashflow, net present value, etc.)

1.

Link theory to case facts (i.e., go beyond just stating the rules and consider the particularcase facts in the analysis)

2.

Evaluate the alternatives (pros and cons, implications of different options, validity ofoptions, etc.)

3.

2.

Analyze Major Issue(s) - Quantitative

Applies the technique correctly1.Calculates accurately2.Explain assumptions clearly3.

3.

Analyze Major Issue(s) - Integrate situation

Integrate the situational assessment into analyses1.Integrate analysis of one issue into another, from one competency area to another, etc.2.

4.

Conclude and Advise

Make a logical/practical choice – one that flows from the analysis1.Display good judgment considering the decision factors identified2.See the bigger picture and consider impact of one analysis on the overall conclusion3.

5.

Communication: Provide clear explanations (viewpoint and “thinking pattern” are evident) 6.

Ethics: Exhibit professionalism, identify the need for a specialist; know professional limitationsand responsibilities

7.

Section C: General Findings and CPA Enabling Skills

Section C of the report is designed to help you identify your major weaknesses in essential areas suchas communication, role playing, ranking of issues, and other exam writing skills, as well as present youwith a re-sorting of the Section A results by the CPA enabling skill.

For the General Findings sub-section, each of the reviewers has answered the same generalquestions, and their findings are summarized for you. Any questions that have a “NO” response arehighlighted. These are the general areas in which you demonstrated weakness.


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Section A: Assessment By Simulation


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Section A: Assessment By SimulationDay 2 - Assurance - TankCo

Assessment Opportunity #1 (FR)

The candidate discusses the revenue recognition for the undeliveredcommercial tanks.

YOU DID NOT ADDRESS THIS ASSESSMENT OPPORTUNITY.Assess the Situation

You identified the revenue recognition issue but your responselacked depth.

Analyze Major Issue(s)-Qualitative

Your discussion of the revenue recognition issue demonstratedtechnical errors. X


Your analysis concluded that, since they had not been delivered yet, the completed tanks on hand should not be recognized in revenue for the year. In fact, you said "TankCo should record an unearned revenue amount of 2 tanks ($240,000 x 2 = $480,000) and in 2016 they would need to record unearned revenue of the remaining one tank as it would have been manufactured completely before mid June since its 90% complete." Using unearned revenue would only be appropriate if TankCo both had not performed AND had received payment in advance. But the opposite of both these things was true. The revenue had been earned, but payment had not been received. As such, an A/R and revenue accounts should have been adjusted. ASPE section 3400, paragraph 9, specifically identifies "bill and hold arrangements" as worthy of special consideration. The fact that the tanks were undelivered only because Goldie had requested it, and Goldie had taken insurance on the tanks, suggested that in fact the risks and rewards associated with the tank had transferred to Goldie despite being held by TankCo.

You did not conclude on an accounting treatment for the revenuerecognition of the undelivered commercial tanks or your conclusionwas not consistent with your analysis.

Conclude and Advise

Reviewer's additional comments onstrengths/weaknesses and recommendations forimprovement:

While you attempted to discuss the revenue recognition issue, your discussion contained technical errors and so did not demonstrate competence on this assessment opportunity.


The candidate discusses the warranty provision related to thedefective tanks.



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You identified the warranty provision issue but your response lackeddepth.


Your discussion of the warranty provision issue demonstratedtechnical errors.


You did not conclude on an accounting treatment for the warrantyprovision or your conclusion was not consistent with your analysis. Conclude and Advise


Your response on this assessment opportunity was sufficient, with a valid discussion of the warranty provision, a reasonable adjustment and a valid conclusion.


The candidate discusses the accounting treatment for the lawsuits.

YOU DID NOT ADDRESS THIS ASSESSMENT OPPORTUNITY. X Assess the Situation

You identified the lawsuit issue but your response lacked depth. Analyze Major Issue(s)-Qualitative

Your discussion of the lawsuit issue demonstrated technical errors. Analyze Major Issue(s)-Qualitative

You did not conclude on an accounting treatment for the lawsuits oryour conclusion was not consistent with your analysis. Conclude and Advise



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On the requirements page for each role, CPA is asked to "review TankCo's draft financial statements, discuss any accounting issues and propose any necessary adjusting entries". Note 6 of the financial statements provided details about an increase in lawsuits during the year. The information in this note suggested that the insurance coverage was insufficient now, and an analysis was required to determine if the ending provision was appropriate. It is not clear if you missed this issue or lacked the technical knowledge to address it. A discussion of this issue should have included identifying the relevant ASPE standards and applying them to the case facts in order to form a conclusion and provide a proposed adjustment.


The candidate discusses the accounting treatment for the deferreddevelopment costs.


You identified the development costs issue but your response lackeddepth.


Your discussion of the development costs issue demonstratedtechnical errors.


You did not conclude on an accounting treatment for thedevelopment costs or your conclusion was not consistent with youranalysis.

Conclude and Advise


Your response on this assessment opportunity was sufficient, with a valid discussion of the accounting for the research & development costs (internally developed intangible assets), a reasonable adjustment and a valid conclusion.


The candidate assesses the impact of the accounting issues on thebank covenants.


You did not provide an overall calculation of the debt-to-equitycovenant or the borrowing base.

Analyze Major Issue(s)-Quantitative


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You calculated one of the debt-to-equity covenant or the borrowingbase, but not both.


You calculated the debt-to-equity covenant and/or the borrowing basebut did not adjust it for the identified accounting errors.

Analyze Major Issue(s)-Integrate Situation

Your calculations demonstrated technical errors. Analyze Major Issue(s)-Quantitative

You did not conclude on your analysis.Conclude and Advise


Your response on this assessment opportunity was sufficient. You made valid adjustments to both of the key covenants (debt to equity ratio and borrowing base), completed a recalculation of each, and concluded whether each was in compliance. Good job.


The candidate discusses the potential impairment of the commercialtank division.


You identified the impairment issue but your response lacked depth. Analyze Major Issue(s)-Qualitative

Your discussion of the impairment issue demonstrated technicalerrors. X


While you recognized the potential impairment of the goodwill due to the losses in the commercial division, you supported your discussion using Section 3063 - Impairment of a Long Lived Asset. This was not appropriate as the impairment of goodwill is dealt with in Section 3064 (intangible assets and goodwill).



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While you attempted to discuss the accounting for the goodwill, your discussion contained technical errors and so did not demonstrate competence on this assessment opportunity.

Assessment Opportunity #7 (AS)

The candidate discusses the engagement issues related to the 2015TankCo financial statement audit.


You did not identify a sufficient number of the relevant engagementissues. X Assess the Situation

While you attempted to discuss the threat to independence, you did not address a sufficient number of the engagement issues. Other engagement issues included: whether or not the 2014 comparative numbers required auditing and how the audited financial statements would be affected if they weren't, whether or not a scope limitation would be required on opening numbers given the work that done during the 2014 review, and whether the timeline for completion (mid-February) was doable given this was a first time audit. Also, you addressed independence from an inappropriate perspective (whether CPA LLP could perform both the audit and the special reporting engagement) as opposed to whether the fact that Rita, the recently retired but previous review engagement partner, was on the TankCo board of directors would create an independence issue for the engagement. While you were not expected to address all of these things, candidates were expected to discuss a few of them sufficiently.

You identified a sufficient number of the relevant engagement issuesbut your response lacked depth.


Your discussion of the engagement issues included technical errors. X


You attempted to discuss the need for CPA LLP to be independent, but you seemed to think that the performance of both the financial statement audit and a special report engagement would be a threat to independence when you said "•The bank has requested a special report to calculate the provisions for the agreement; provisions include the debt to equity covenant and the borrowing base restriction on line of credit. We need to ensure we can perform this task objectively. To avoid conflict of interest and self review threat we can ensure that a different department of CPA LLP performs the special report that the bank is requesting." Since both of them were assurance engagements (as opposed to advisory services), there would be no independence issue. In fact, some of the financial statement audit work could have been leveraged to use in the special report engagement as well.

You discussed some of the engagement issues, but one or some ofyour recommendations were not practical. Conclude and Advise



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Your response on this assessment opportunity was lacking in breadth and contained technical errors. There were a number of relevant audit issues in the case and it was necessary to address some of these.


The candidate discusses the overall financial statement risk for theTankCo audit.


You did not identify a sufficient number of relevant risk factors.Assess the Situation

You identified several risk factors but your discussion of the factorslacked depth. X


Although you identified several relevant factors affecting the risk level, such as the fact that this was the first time TankCo would have its financial statements audited, the company lost its owner this year who had previously provided oversight and the replacement did not have a lot of time with him to learn the job, the controller did not have a formal accounting designation, and the control environment, and concluded appropriately on an overall level of risk, you did not always explain why these factors increased or decreased risk. For example, you said "•Inherent risk is increased because Lou died and Josh [interim manager] did not get sufficient training from him since he was hired a month ago.", but a better response would have explained why the risk factor would have led to (or prevented) additional errors in the financial statements (i.e. that the lack of oversight from Lou or Josh's inexperience may have allowed errors to slip through unnoticed.) Similarly, you said "•Inherent risk is increased because Marvin [controller] does not have a formal accounting designation and has been given authority to act on Lou's behalf." but a better response would have explained that the lack of accounting education of the controller may have caused him to make errors in accounting policy choices or in recording the transactions, or not to notice errors the accounting clerk made. As a final example, you said "• Inherent risk is high because this is a first time audit engagement." You need to explain why/how this increases risk of error (e.g. the opening balances were not subjected to the same level of testing in the prior year review engagement, and as such, there may have been errors that went undetected. These errors may be more difficult to detect a year later.)

You did not conclude on an appropriate overall audit risk level for theengagement. Conclude and Advise


While you attempted to discuss the audit risks, you did not achieve sufficient depth in your analysis. The case presented a large number of factors that would affect audit risk and it was necessary to sufficiently discuss a reasonable number of them.


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The candidate discusses the materiality and approach for the TankCoaudit.


You attempted to discuss materiality but your response lacked depth. Analyze Major Issue(s)-Qualitative

You attempted to discuss the overall audit approach but yourresponse lacked depth. X


While you attempted a discussion of the audit approach, you did not sufficiently support your recommendation for a substantive approach. You said: "Audit Approach: •Because this is the first time conducting the audit engagement and the internal controls cannot be relied upon because of the weak control environment, I recommend a substantive approach. •Note that even though we are doing a substantive approach we should recommend to TankCo, improvements that they can implement and later on assess and monitor whether those controls are effective" The fact that this was a first time audit was irrelevant (so long as controls are effective, a combined approach could be used for a first time engagement). Your statement that there was a weak control environment needed more case fact support. There were several case facts that could have been used to support a conclusion for either a substantive or combined approach, including the loss of Lou or Marvin's lack of accounting designation and what that might mean for controls overall, the strength of controls in the sales cycle despite the lack of controls in the purchasing cycle, the volume of sales transactions in each of the residential and commercial divisions, etc. Candidates were not expected to discuss all of these factors, but specific case facts were expected to be discussed in support of the recommended approach.

You did not conclude on the overall materiality or audit approach forthe engagement. Conclude and Advise

Your discussion of materiality and/or approach demonstratedtechnical errors.



While your discussion of materiality was sufficient, your discussion of the suggested audit approach was not in sufficient depth.


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The candidate performs analytical procedures for the purpose offurther assessing audit risk.


You did not identify a sufficient number of the income statementvariances. Assess the Situation

You attempted an analytical review but your response lacked depth. X


While you identified a sufficient number of income statement variances including sales, cost of sales, SG&A, interest expense and depreciation, your discussion around these variances lacked depth. You attempted to discuss the sales variance when you said "Sales decreased by 17% could be due to decreaed revenue by holding the tanks for Goldie and not recognizing it." A better response would have described some known factors that occurred in the past year that would explain the variance, such as the loss of the key distributor, the additional sales rebates offered, and/or the loss of Lou who was the driving force behind sales. The $480,000 sales related to holding tanks for Goldie Corp was not going to explain a $2,500,000 sales difference. You attempted to discuss the cost of sales variance when you said "Decrease in cost of sales by 14.78% could be due to not recognizing the 50 tanks that are likely to be brought back and replaced." A better response would have compared the decline in cost of sales to the decline in sales to see if they were moving in parallel, and attempted to explain any difference. The 17% decline in sales you recognized earlier, should have suggested a 17% decrease in cost of sales as well. The fact that it decreased only by 14.78% suggested cost of sales were higher than expected, not lower as your discussion indicates. You did not attempt to explain your variances in SG&A, interest or depreciation.


While you attempted a quantitative analysis of the income statement variances, you did not discuss the variances in sufficient depth, with reference to some of the relevant case facts.


The candidate recommends audit procedures for the high risk areas.


You did not provide a sufficient number of audit procedures.Assess the Situation


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You provided several audit procedures, but your response lackeddepth. X


You attempted to provide procedures for the bill and hold sales, the warranty costs, the development costs, the goodwill impairment, and the opening balances, but your procedures were not always sufficiently specific. For example, you said "Goodwill: •There is risk of overstating goodwill. We need to obtain sufficient appropriate audit evidence to test the existence and valuation of goodwill. •Recalculate the fair value of goodwill, and compare with the carrying amount to determine is imparement exists." It was unclear how this was to be done. For the procedure to be useful in the planning memo, it should have articulated what document was to be obtained, what the auditor would be looking at it for, etc. For example, what information would the auditor use in order to calculate the value of goodwill? If you are simply suggesting obtaining management's calculation and reperforming it, this would not be sufficient. The inputs to the calculation would need to be audited for reasonableness and the partner needed to know how this was to be done. As a second example, you said: "Opening balances: •We need to obtain assurance over the opening balances CAS 510 and obtain sufficient appropriate audit evidence about whether the opening balances contain misstatements that materially affect the current periods financial statements. •Discuss with person who performed review engagement as to whether there is any additional information he would like to disclose. •Read over information provided from previous years review engagement [appednix 3] and add procedures based on these conclusions." These procedures were not specific enough. The case provided details as to what work had already been performed last year that were at an audit level (inventory count, bank/debt confirmations), and which were not (testing A/R and A/P for plausibility and discussion of PPE). As such, your procedures should have focused on how to test last year's A/R, A/P and PPE (e.g. subsequent receipts/payment testing, vouching to invoices, recalculating depreciation, etc.).

You recommended several audit procedures, but these were eithernot focused on the high-risk areas for the TankCo audit or you did notexplain why this area was high risk.



While you provided a number of audit procedures, your procedures were not always sufficiently detailed to be of use to the partner.


The candidate discusses any internal control deficiencies found inthe sales and purchasing cycles.


You did not identify a sufficient number of valid internal controldeficiencies. Assess the Situation

You identified a sufficient number of internal control deficiencies, butyour response lacked depth.



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You discussed a sufficient number of internal control deficiencies,but you did not always make appropriate recommendations. Conclude and Advise


Your response on this assessment opportunity was sufficient, with several of the internal control weaknesses discussed and addressed with a valid recommendation.


The candidate discusses the reporting options for the special reportrequired by the bank.


You did not identify a sufficient number of valid reporting options. X Assess the Situation

While you attempted to discuss different reporting options, some of the reporting options you provided were not valid in this situation. You suggested a Section 8600 - reviews of compliance with agreements and regulations, Section 9100 - reports on the results of applying specified auditing procedures to financial information other than financial statements and a Section 9200 - compilation engagement. These reports were not appropriate given that Appendix III of the additional information provided indicated that the report needed to be audited. Valid reports included: the audited financial statements, a Section 5815 - Compliance with agreements, statutes and regulations (which you identified) and a Section 805 - audit of single financial statements and specific elements, accounts or items of a financial statement. Candidates were expected to identify and explain a few of the valid reporting options.

You identified a sufficient number of valid reporting options, but yourresponse lacked depth. X


While you identified an appropriate report when you suggested a Section 5815 - Compliance with agreements, statutes and regulations, your response focused on very generic considerations, such as the cost of the report, the time to complete, the level of assurance/type of opinion. The level of assurance was already stated in the banking agreement, as you were told the report needed to be audited. The cost and time were not the most important factors in this case as the bank had the right to request an audited report, whatever the time or cost may end up being. A stronger response would have explained why a suggested report would apply in the current situation, showing a good understanding of what this report was. For example: a Section 5815 report could audit the entire banking agreement, including the inputs to (debt, equity, A/R and inventory) and the calculation of the debt to equity covenant and borrowing base limit, providing an audit opinion on whether or not TankCo was in compliance with the banking agreement as at December 31, 2015.

You discussed a sufficient number of valid reporting options, but youeither did not recommend a particular report or your recommendationwas inappropriate.

X Conclude and Advise


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You recommended an invalid report when you said "I recommend performing a S8600 because the level of assurance should be sufficient enough for the bank". The covenant agreement (per Appendix III of the additional information provided to the assurance role) stipulated that the special report requested would be audited. As such, reports that did not provide this level of assurance would not be satisfactory for the bank.


While you attempted to discuss the reporting options, you did not provide a sufficient number of valid options, you did not discuss the one valid option you did identify in sufficient depth, and you recommended an invalid report. As such, you did not demonstrate competence on this assessment opportunity. Not picking up on the fact that the case indicated an audited special report caused much of these issues. Please be sure to read the case carefully.

Overall Comments

Was the response well organized with a logical flow? Yes

Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case. You provided good structure while responding to the requests. For example, your use of the weakness, implication, recommendation structure ensured that you obtained sufficient depth in your control weaknesses analysis.

Did the candidate understand their role?Yes

You appeared to have understood your role as the auditor and addressed the partner's requests appropriately.

Was the response easy to read and understand?Yes

Your response was written efficiently and was easy to read and understand. You used point form but your thoughts were usually complete and clear.

Did the candidate focus their response on the appropriate issues?Yes

You did a good job focusing your response on the significant requests and issues in this case and your response did not contain any unrelated issues.

Did the response appear balanced?Yes

Your response was well-balanced and you seemed to have allocated an appropriate amount of time to each of the assessment opportunities.


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Day 3 - Case #1 - PlayAssessment Opportunity #1 (MA)

The candidate analyzes which pricing alternative maximizes cashflows.


You did not provide an analysis of both of the pricing alternativespresented. Assess the Situation

You did not include a sufficient number of elements in yourquantitative analysis of the pricing alternatives. Assess the Situation

Your quantitative analysis of the pricing alternatives containedtechnical errors. X


Your analysis of the "Pay as you Play" option double counted the additional administrative costs and there was no audit trail for the number in cell D20. Your analysis of the "Junior and Master builder" option did not include an attempt to calculate the current customer revenue (50%).

You did not compare the pricing alternatives to the status quo. X


While you compared the pricing alternatives to each other, you did not compare them to the status quo. CPAs are expected to "assess the situation" as part of their analysis and, while not specifically directed to compare to the existing status quo revenue, it was important to consider whether the new alternatives were better or worse than the existing pricing strategy. Under the actual pricing process, the company generates $9M. According to your analysis and recommendation, the company will generate $2 395 000, which is significantly lower than now you should have addressed this with the client.

You did not provide a conclusion that was consistent with youranalysis. X Conclude and Advise

Your conclusion in the Word document refers to go with Option 2 but your quantitative analysis in the Excel spreadsheet is incomplete and very confusing. You do not have any total per option and you do not consider the actual customer base. There is also a lack of audit trail in the Excel spreadsheet.


The overall response to this issue is not acceptable since there are no comparison to the status quo and the analysis of both options is not clear and there are significant errors like double counting the administrative costs under Option 1 and not including the actual customer base under Option 2.


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Assessment Opportunity #2 (MA)

The candidate analyzes whether outsourcing the sanitization processis a viable option, from a quantitative perspective.


You did not include a sufficient number of elements in yourquantitative analysis of the cost of outsourcing the sanitizationprocess and keeping it in-house.


You did not properly incorporate the concept of one-time costs intoyour analysis. X


In Appendix I, the Wrights provided information about cash flows which would only occur at the start of the Clean Crew contract, including severance, counselling and proceeds from selling the equipment. You prepared only a one-year cash flow and the severance, counselling and proceeds from the equipment sale were included. It is important to consider these costs so the Wrights know how they are incorporated, but you needed to separate them from ongoing costs. This could be done by showing cash flows in two columns. One column would be the first year and the other would be ongoing cash flows. Moreover, you consider severance for only 1 employee.

Your quantitative analysis of the cost of outsourcing the sanitizationprocess and keeping it in-house contained technical errors. X


You calculated the severance payment for only 1 employee. It should have been for 8.

You did not compare the cost of outsourcing the sanitization processto the cost of keeping it in-house. Conclude and Advise


Overall, your calculations of the sanitization options incorporated some reading errors which made your analysis less useful for the Wrights. Reading errors reflected in your response were you included only one annual staff salary when the case stated there were eight staff. A significant evaluation component of this AO is the treatment of one-time costs and you did not show proper understanding.

Assessment Opportunity #3 (GOV)

The candidate evaluates the qualitative factors related to theoutsourcing of the sanitization process.



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You did not identify a sufficient number of factors to be considered inthe decision to outsource. Assess the Situation

Your discussion of the factors that needed to be considered in theoutsourcing decision lacked depth (i.e. use of case facts, impact,etc.).


You did not provide a balanced discussion, focusing on only the risksor the benefits related to the outsourcing option.


You did not provide a consistent recommendation on whether theoutsourcing option should be chosen. Conclude and Advise


Overall, your response on this assessment opportunity was well done. You provided a balanced discussion of the risks and benefits regarding the outsourcing option with Clean Crew and provided Sam and Sarah with a consistent recommendation.

Assessment Opportunity #4 (TAX)

The candidate discusses the sale of the Wright family's Torontohome.


You did not discuss the principal residence exemption. Analyze Major Issue(s)-Qualitative

Your discussion of the principal residence exemption lacked depth[ i.e. use of case facts, technical knowledge, etc.].


Your discussion of the principal residence exemption containedtechnical errors.



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You did not take the cottage into consideration in your discussion ofthe principal residence exemption.


You based your discussion on the total gains rather than the averageannual gains on the house and the cottage in your discussion ofwhich residence to designate as the principal residence.


You did not provide a reasonable recommendation on whichresidence should be designated as the principal residence. Conclude and Advise


You did not address this assessment opportunity. Page 1 of the case directed you to Appendix III. The case facts provided indicated that the Wrights had two residential properties and were planning to sell one of them. You were expected to recognize the related tax implications of these transactions. Ensure that you consider all of the data provided when you are not directed to a specific requirement, so that you identify what the client needs you to do.


The candidate discusses the tax implication of moving expenses.


You did not address whether or not the proposed move would beeligible for the purpose of deducting moving expenses. Assess the Situation

You did not address the deductibility of a sufficient number of movingcosts.


Your discussion of whether the proposed move would be eligible forthe purpose of deducting moving expenses lacked depth [ i.e. use ofcase facts, technical knowledge, etc.].


Your discussion of the tax rules around the eligibility or limitation ofdeducting moving costs contained technical errors.



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Your discussion of the tax rules around the deductibility of specificmoving costs contained technical errors.



Overall, your response on this assessment opportunity was well done. You provided a sufficient discussion of Sarah's eligibility to claim moving expenses and analyzed a sufficient number of specific costs for deductibility.

Assessment Opportunity #6 (FIN)

The candidate discusses the investment options available to theWright family.


You did not address all three investment options in your analysis.Assess the Situation

Your discussion of the investment options lacked depth (i.e. use ofcase facts, technical knowledge, etc.). X


You could have developed further risks on Option 2 by supporting it with case facts such as the fact that it has a beta of zero and / or the bonds are guaranteed by the government You identified that the mutual funds are high risk when you wrote "This option involves risks as the mines are still beign developed" but this could have been developed further by discussing that the beta of 4.5 is very high compared to the overall market average of 1.0 and / or that the underlying assets are exposed to the risks inherent in the mining industry, volatile commodity prices, foreign currency, and foreign government regulation in South Africa.

You did not provide a balanced analysis of the risks and rewards forall of the investment options. X


You used data from the case to analyze the potential return for the investment alternatives, but should have also used information from the case to compare and contrast their different risk profiles. Given the very clear reliance on the funds for their children's education, it was very important to explain how risky some of the investments were. You only identified risk for Option 1 but you did not talk risk for Option 2 and you did not mention why it was risky for Option 3.

Your discussion of the investment options contained technical errors. Analyze Major Issue(s)-Qualitative


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You did not provide a recommendation on which investment optionshould be chosen, or your recommendation was not reasonableconsidering the objectives of the Wright family.

Conclude and Advise


Your overall response is not properly balanced with returns and risks analysis. In order to make good recommendations as a consultant, you need to analyze and explain to your client both sides.

Overall Comments


Your response was well organized and easy to follow. You used headings and separated your discussions by each issue addressed, which was a logical way to respond to this case.

Did the candidate understand their role?No

You did not always provide Sam and Sarah, the users, with sufficient information to respond to all their needs. For example, you did not answer the question on the sale of the house and your analysis on the investment opportunity is weak.


Your response was written efficiently and was easy to read and understand. You used point form and complete paragraphs which allowed you to provide thoughts that were complete and clear].

Did the candidate focus their response on the appropriate issues?No

You did not answer the question on the sale of the house.




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Day 3 - Case #2 - Dogani Inc.Assessment Opportunity #1 (FR)

The candidate discusses the accounting for the exchange of theparcels of land in accordance with IFRS.


Your discussion of the non-monetary transaction issue lacked depth(i.e. use of case facts, technical knowledge, etc.). X


You attempted to address the land exchange when you wrote: “The new controller recorded a gain of $100,000 on the exchange of lands. This amount cannot be classified as revenue because it is not in the ordinary course of business for DI to be exchanging lands. According to IFRS 16 PPE, gain is meant to be included in profit and loss, and should not be classified as revenue”. However, your response lacked depth because it did not include any Handbook criteria to consider for non-monetary transactions. You only discussed whether the gain should be classified as revenue. A stronger response would have also discussed whether the transaction lacks commercial substance and whether the fair value of the asset received or the fair value of the asset given up can be reliably measured. Your response also lacked depth because it did not include a sufficient number of case facts to consider. You jumped to the conclusion that the $100,000 gain was appropriate without discussing whether you could use management’s fair value estimates to reliably measure fair value. The case provided two management estimates (the estimate based on the selling price of similar properties, and the estimate based on applying the consumer price index to the acquisition price) that you should have considered before reaching your conclusion.

Your discussion of the non-monetary transaction issue containedtechnical errors.


You did not provide a recommendation on how to record the non-monetary transaction that was consistent with your analysis. Conclude and Advise


Although you attempted to address the land exchange, your discussion was not well supported. You did not address all the relevant Handbook criteria or apply the appropriate case facts to your analysis, and as a result, were unable to obtain sufficient depth. Ensure you spend the time to adequately discuss any accounting issues you identify, so that your conclusion is well supported.


The candidate advises on whether the information that Gale isproposing to give to the bank will be useful in securing the loan andsuggests what other information the bank may require.



22 / 49

You did not address a sufficient number of items that Gale isproposing to give to the bank in your discussion. X Assess the Situation

You were given a list of proposed information to be provided to the bank to help secure the bank loan and were asked by Gale to assess the usefulness of these items, and to advise her on any other information that they may require. You needed to address a sufficient number of these items in your response to provide an adequate assessment to Gale. You only addressed the pro-forma statement of financial position. However, a more complete response would have addressed more items, such as the personal guarantee from Gale’s uncle, Gale’s building value estimate, Gale’s proposed bank terms, the email of interest from the Ontario Provincial Police, the aged listing of accounts receivable and payable and a list of inventory, the proof of directors and officers liability insurance, the personal tax returns of the three shareholders and corporate tax returns, the benefit of providing a ratio analysis to the bank, or the fact that Gale may not need to provide all the information proposed.

You did not adequately explain whether the items that Gale isproposing to give to the bank would be useful to the bank.


You did not provide reasonable recommendations on how the itemsGale is proposing to give to the bank could be improved. Conclude and Advise


You addressed the pro-forma statement of financial position in sufficient depth and provided a valid recommendation when you wrote: "- Yes these information will be useful to the bank, the pro forma statement however should also be reviewed to ensure that the estimations made a reasonable. - In addition the bank might require a forecased cash flow for the next 5 years [proposed loan term] showing exactly how DI will be able to pay the principal payments and interest". However, your discussion overall lacked breadth, especially considering that the items to be addressed were clearly laid out in Appendix IV. Ensure you allocate enough time to address the key requirements of the case.


The candidate assesses the risks related to the audit of DI’s financialstatements as at and for the year ended December 31, 2015.


You did not identify a sufficient number of factors that would affectthe risk of material misstatement for the current year audit. Assess the Situation

Your discussion of the factors you identified that would affect the riskof material misstatement for this audit lacked depth (i.e. use of casefacts, impact, etc.).

X Analyze Major Issue(s)-Qualitative


23 / 49

Your assessment of the risks of material misstatement did not always adequately explain why the identified factors affected risk or integrate case facts to support your analysis. It was important to support your risk assessment, and your response did not sufficiently address these points. For example, related to the fact that it is DI’s first audit, you wrote: “First time audit increases the inherent risk of this engagement”. A stronger response would have explained why this factor impacted the risk assessment – that there may be undetected errors in the opening balances due to the fact that they have never been audited. As another example, you wrote: "Exceptions were found in the process that professional services had designed for DI's process and controls. This reduces control risk". A stronger response would have explained why this factor impacted the risk assessment – that Gale mentioned that a few control exceptions had been found so it appears the controls may not be effective, which increases the risk that material errors will not be caught by DI’s controls.

You did not provide an overall assessment of the risk of materialmisstatement that is consistent with your analysis. Conclude and Advise


You addressed some factors that affect the risk of material misstatement, including the fact that it was a first time audit, there is a new bank loan and Gale mentioned that a few control exceptions had been found. However, your discussion overall lacked depth, as you did not always adequately explain why the factors you identified increased or decreased the risk of material misstatement. Ensure that you always provide an adequate explanation for any items you identify.


The candidate suggests an audit approach and determines materialityfor the audit of DI’s financial statements as at and for the year endedDecember 31, 2015.


You either did not suggest an audit approach or did not determinemateriality for the audit. Assess the Situation

Your discussion of the suggested audit approach and/or materialitylacked depth (i.e. use of case facts, technical knowledge, etc.). X



24 / 49

Your response did not adequately address materiality for the DI audit. You discussed how the users (i.e., bank and owners) would affect the materiality level, the basis to be used for materiality, and the % to be applied for the calculation of materiality and performance materiality. You also provided a calculation of materiality; however, you did not adjust the calculation for any accounting adjustments. In addition, your response did not adequately address the audit approach for the DI audit. You wrote: “DI has controls in place, although collection process slowed down significantly and Gale has noted some exceptions. We therefor cannot solely rely on controls. -I recommend substantive test of details around the accounts receivables area because it is a high risk area given that collections slowed down significantly. High risk areas also include the assets, as bank will require security for the $2.5 million borrowed". A stronger response would have considered and discussed additional case facts that would have impacted the chosen approach, such as the fact that the approach required consideration for auditing the opening balances.

Your discussion of the suggested audit approach and/or materialitycontained technical errors.



While you attempted to discuss both the audit approach and materiality of the DI audit, you did not provide sufficient depth in your discussions of either area. In your discussion of the audit approach, you did not consider the audit of opening balances. In your discussion of materiality, you provided a discussion of materiality and a calculation, but did not incorporate any adjustments. In any discussion of the audit plan, it is important to provide sufficient depth in all the elements of the audit plan in order for your discussion to be complete.


The candidate discusses the tax issues noted by the client.


You did not address a sufficient number of tax issues.Assess the Situation

You did not focus your response on the most significant tax issues.Assess the Situation

Your discussion of the tax issues lacked depth (i.e. use of case facts,technical knowledge, etc.). X



25 / 49

You discussed some of the corporate tax issues that Gale was concerned with. However, you did not always support your analysis with tax knowledge. For example, relating to the luxury sport utility vehicle lease, you wrote: “And bceause the car is being used business purposes it can be deducted in DI's corporate tax return”. A stronger candidate would have provided the specific tax rule as part of the discussion, which is that the maximum allowable deduction is $800 per month. As another example, relating to the interest-free home relocation loan, you wrote: “Researcher got interest-free home relocation loan & DI leased luxury sports car for researcher at cost of $1,500 per month for business purposes: The interest portion of the home relocation loan is a benefit to the researcher”, but you did not apply any specific technical knowledge to your discussion. A stronger response would have noted that the employee is deemed to have received a benefit equal to the amount of interest that is computed at the prescribed rate, but relief is available up to a maximum of $25,000 of funds loaned, if the employee moved at least 40 kilometres closer to DI.

Your discussion of the tax issues contained technical errors. Analyze Major Issue(s)-Qualitative


You addressed whether Louis’s wife’s expenses were deductible in sufficient depth by discussing the correct tax rule and applying specific case facts when you wrote: "How paying for Louis and his wife will affect DI's corporate income tax: The ITA allows a corporation to deduct reasonable expenses. Since Louis's wife did spend some time promoting DI to European distributors, only that portion of her travel expenses can be deducted. The time tat she spend sightseeing was not for the purpose of earning income, therefore cannot be deducted. Therefore, Gale should not deduct the pro rated Louis's wife's part of the trip from sightseeing." However, for some of the other issues you addressed, you did not always provide the appropriate tax rule or apply case facts. A common and effective way to address tax issues would be to state the tax rule, and then discuss any case facts that are relevant to the rule, to come to an overall conclusion for the client.


The candidate analyzes the make versus buy decision and provides arecommendation to Gale.


You did not provide a quantitative analysis of the make versus buydecision. Assess the Situation

You did not provide a qualitative analysis of the make versus buydecision. Assess the Situation

Your quantitative analysis of the make versus buy decision containedtechnical errors. X



26 / 49

You attempted a quantitative analysis of the make versus buy decision, but you did not adjust for the overhead costs in your calculation. You were told that there were $75,000 paid to the product line supervisor and $35,000 in utilities that would be saved by outsourcing. These were the relevant overhead costs, while the remaining $265,000 would be irrelevant to the analysis, given that these costs would be incurred for either option. A stronger response would considered this in the calculation, by excluding the irrelevant overhead costs ($265,000) completely, and either adding the relevant overhead costs ($110,000) to the make option, or deducting them from the buy option.

Your qualitative analysis of the make versus buy decision lackeddepth (i.e. use of case facts, impact, etc.).


You did not provide a recommendation on whether DI should make orbuy that was consistent with your analysis. Conclude and Advise


You provided a reasonable qualitative analysis, as you addressed quality control considerations and the references provided. However, you did not provide a reasonable quantitative analysis. In any make versus buy decision, it is important to provide an accurate quantitative analysis, in order for the users to have the correct information on which to base their decisions.

Overall Comments


Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case.

Did the candidate understand their role?Yes

You appear to have understood your role as an auditor and addressed all of the assessment opportunities from the right perspective.


Your response was written efficiently and was easy to read and understand. You used a combination of point form and complete paragraphs which allowed you to provide thoughts that were complete and clear. You did not use an exhibit for your quantitative analysis. Exhibits can be a good way to show your calculations, if they contain a statement of purpose to help you stay focused, contain notes that reference adjustments in your exhibits to explanations and a conclusion to summarize the results of your quantitative analysis. This can be very helpful in understanding your calculations.


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Did the candidate focus their response on the appropriate issues?Yes



Your response was well-balanced and you seemed to have allocated an appropriate amount of time to each of the assessment opportunities. However, your response was only 4 pages in length, which is significantly shorter than the average response length in this case, and was not enough to sufficiently address all of the requireds. It is important to plan your time on between cases and ensure you allocate a sufficient amount of time to each of the significant issues within a case.


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Day 3 - Case #3 - Culinary CrawlAssessment Opportunity #1 (TAX)

The candidate calculates Ivy's business income for tax purposes.


You did not identify a sufficient number of adjustments to Ivy'sbusiness income for tax purposes. Assess the Situation

You did not explain the adjustments made to Ivy's business incomefor tax purposes.


Your calculation of the business income for tax purposes containedtechnical errors. X


Although you addressed the PPE/CCA, Home Office and Telecommunication tax adjustments, some of the analyses and calculations contained technical errors. The capital purchases of $600 and $2,500 should have been added back to taxable business income and a Capital Cost Allowance (CCA) deduction should have been taken instead. The computer belongs to class 50 at a rate of 55%, and the furniture belongs to class 8 at a rate of 20%. Because 2015 is the year of purchase, both would be subject to the half-year rule, and as the first year of business, would be prorated for the short year (Computer: $600 * 55% * 50% * 122/365 days = $55; Furniture: $2,500 * 20% * 50% * 122/365 days = $84). Your calculation used the useful life of the assets instead of the CCA rates. For the telecommunications adjustment, you should have discussed that the amounts would be deductible to the extent that it is used for business purposes. You explained the adjustment by stating, ''Only 4 months in business, $800/ year, $67/month, 4 months =$267, 50%, $133'', which did not clearly demonstrate that you understood the criteria that only the business use would be deductible.


Overall, your response was lacking in depth of accurately explained adjustments. There were a large number of taxation adjustments and it was critical that you correctly adjusted a reasonable number of these items with adequate depth of analysis. This would have helped Ivy in understanding and determining her business income for taxation purposes, as was requested in the case.


The candidate calculates the profitability of the two expansionopportunities.



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You did not provide a quantitative analysis of both the lunch tour andthe evening tour. Assess the Situation

You did not include a sufficient number of elements in yourquantitative analysis of the expansion opportunities. Assess the Situation

Your quantitative analysis of the expansion opportunities containedtechnical errors.


You did not conclude on which alternative is more profitable.Conclude and Advise


You seemed to have dedicated some time to providing qualitative factors for the lunch and evening tour. The case specifically stated, "I can only add one for now, so please let me know which one you think would be more profitable." As such, your focus should have been on the quantitative analysis of the two options, which was not done.


The candidate calculates the number of customers required on Ivy'scurrent tour to replace her current employment income.


Your calculation of the number of customers needed to replace Ivy'semployment income contained technical errors. X


For the Contribution Margin, Appendix I of the case provided the pricing of $100 and food costs of $60 for a contribution margin of $40 per person. This amount should have been used to calculate the number of customers required to replace Ivy's employment income. However, you used the price of $100 to calculate the number of customers.



30 / 49

Although you attempted to calculate the number of customers required to replace Ivy's employment income, you seemed to struggle on the appropriate calculation to use to address this requirement. A breakeven analysis is used to determine what level of 'x' (in this case, customers) are needed to cover total 'y' (in this case, employment income). The employment income (incorporating or not incorporating fixed costs), should have been divided by current contribution margin, which represents the incremental profit for each customer, to calculate the appropriate number of customers.


The candidate provides an analysis of the pros and cons of thebusiness strategy and environment in which CC operates.


You did not address a sufficient number of pros and cons in youranalysis. X Assess the Situation

You addressed some pros and cons in your analysis but the case provided lots of commentary about the business strategy and environment that could have been discussed. Some points that could have been discussed included the pros of Ivy's industry knowledge, Ivy's industry networks, the company's reputation, Ivy's great tour information, the business' focus on special events, growth opportunities, value proposition to restaurants, low financing rates and the cons of Ivy's limited business knowledge, a time consuming business, a highly substitutable business, low barriers to entry, reliance on restaurants, low repeat rate, seasonal industry. Some of your discussion points were not valid as they were not consistent with the case facts. For example, your discussion stated that ''Business strategy seems to be casual (Con), I sugesst Ivy formalizes it.'', which was not suggested anywhere in the case, nor did you expand on the point to try to justify it.

You did not provide a balanced discussion, focusing on only the prosor cons in your analysis.


Your discussion of the pros and cons lacked depth (i.e. use of casefacts, impact, etc.).


Your discussion focused on the control weaknesses or the expansionoptions, instead of analyzing the pros and cons of the businessstrategy and environment in which CC operates, as requested.



Although you attempted to address the pros and cons of the business strategy and environment, your analysis was lacking breadth, especially given the volume of information provided in the case. In situational assessments of strategy and governance, you will typically be required to interpret the case facts and provide a thorough evaluation to demonstrate your understanding of the internal and external environment and its impact on strategy development.


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Assessment Opportunity #5 (ASSU)

The candidate provides an analysis of the current controlweaknesses, and suggests functionalities that could be built into thewebsite and other control processes to fix these weaknesses.


You did not identify a sufficient number of control weaknesses.Assess the Situation

You did not adequately explain the implications of the controlweaknesses you identified.


Your recommendations to solve the internal control weaknesses wereeither too general, poorly explained, impractical, or did not fix theweakness identified.

Conclude and Advise

None of your recommendations involved the use of websitefunctionalities. Conclude and Advise


Overall, your response on this assessment opportunity was well done. You identified the control weaknesses specified in the case, addressed the key implications, and suggested recommendations to mitigate the risks. Furthermore, you tailored your discussion to include website functionalities as requested in the case. Specifically, your discussion of the Misplaced reservations, Restaurant notifications and Business vs personal assets control weaknesses were strong.


The candidate provides an analysis of the deficiencies in Ivy’s currentdebt structure and provides a recommendation for her upcomingmortgage renewal.


You did not address Ivy's debt structure, or the interest rate related toher mortgage renewal. Assess the Situation


32 / 49

Your discussion of the mortgage interest rate lacked depth (i.e. use ofcase facts, impact, technical knowledge, etc.). X


Although you addressed Ivy's mortgage renewal, your discussion lacked the depth required to demonstrate your understanding of the Finance concept. The decision of which interest rate to choose for the renewal was dependent on many factors, including Ivy's situation, her risk tolerance and expectation of future interest rates. In terms of Ivy's situation and risk tolerance, she has a lot of debt and is in a transition period of her life where she may quit her job and pursue the new business. It would be preferable to have the mortgage renewed before she makes that decision as well as incorporating her debt situation into her decision. For the expectation of the future interest rates, if the prime rate stays around 1%, Ivy would be better off with the variable rate mortgage but if the prime rate increases above 1.5%, she would be better off with the fixed rate mortgage. Either way, the difference is negligible and in the worst case scenario of prime dropping to 0%, the difference between the two options would amount to approximately $6,000 ($400K x (2.5% - 1.0%)) of additional interest paid annually under the fixed rate compared to the variable rate. Furthermore, it would be reasonable to assume that interest rates are going to rise again as the prime rate is quite low at the moment. Your discussion included the following comments, ''-I advice you to chose the fixed rate of 2.5% instead of the prime plus 1% because there is no control over what prime will be in the future since this is for 3 years.'' This was not considered sufficient as you didn't justify your recommendation to Ivy's situation. A better response would have stated that 'because there is no control over prime rate for variable mortgages, it would be considered risky for Ivy considering she may not have a recurring flow of income with the new tours. As such, a fixed mortgage would be suitable for her so she knows what her monthly payments would be and can budget accordingly.'

Your discussion of Ivy's debt structure lacked depth (i.e. use of casefacts, impact, etc.). X


Although you addressed Ivy's debt structure, your discussion lacked the depth required to demonstrate your understanding of the Finance concepts. There were several items that could have been discussed. Given Ivy had multiple debts with different interest rates, she would be much better off paying the credit card debt first as it has the highest interest rate, instead of the mortgage payments, student loan payments, or RRSP contributions. Ivy had also mentioned "I haven’t managed to pay off my credit cards. I’m not even sure whether I made any of the minimum payments last month." You could have advised her to make the minimum payment required on her credit cards, since failure to do so can lead to late fees and harm her credit rating. Another area that you could have discussed was related to consolidating her debts. Since she has the opportunity to renew her mortgage at a low interest rate, there is an opportunity to renew for a larger principal amount and use the additional funds to pay off the student loan and credit cards debt, assuming she has the equity available on the property to do so. Another option would be to obtain a line of credit with a lower interest rate and using that financial instrument to pay off the higher interest rate debts. Your discussion included the following comments, ''You might want to consider leveraging yourself agains the multiple debts that you have.'' This was not considered sufficient since it did not provide detail on how Ivy could do that. You need to consider the user's level of proficiency and provide details that will help them understand what is required.

You did not provide a valid recommendation on which mortgagerenewal option Ivy should choose. Conclude and Advise



33 / 49

Although you attempted to address both Ivy's debt structure and mortgage renewal options, your analyses were not tailored to specifically address Ivy's key concerns. It is important to evaluate the sources of financing but it is just as important to apply this knowledge to the business situation for you to demonstrate a good understanding of the finance concept and the case.


The candidate provides an overall recommendation regarding.


You did not integrate a sufficient number of analyses in yourdiscussion. X


You integrated the Control Weaknesses risk management point into your overall recommendation of whether Ivy should quit her day job. However, there were several other risk management points that should have been integrated in your overall recommendation. These included the Expansion Analysis, Breakeven Analysis, Business Strategy and Environment and Debt Structure.

Your recommendation on whether Ivy should quit her day job was toogeneral or poorly supported. Conclude and Advise

You did not provide a valid recommendation on whether Ivy shouldquit her day job. Conclude and Advise


Although you provided a recommendation of whether or not Ivy should quit her day job, it was not well supported. There were several analyses that you performed throughout the case and it was expected that you integrated them into your overall conclusion to provide Ivy with guidance that was supported and consistent with the rest of your response.

Overall Comments


Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case. In addition, you provided good structure while responding to the requests. For example, your use of the weakness, implication, recommendation structure ensured that you obtained sufficient depth in your control weaknesses analysis.

Did the candidate understand their role?No


34 / 49

You did not appear to have understood your role as an advisor at a local accounting firm. You did not always provide Ivy, the user, with sufficient information to respond to her needs.

Was the response easy to read and understand?No

Point form was used throughout your response and this sometimes limited the depth of your discussions. For example, you wrote, ''You might want to consider leveraging yourself agains the multiple debts that you have''. You should ensure that you always provide a complete discussion to clearly present your thoughts, even when using point form.

Did the candidate focus their response on the appropriate issues?No

You spent time discussing the qualitative aspect of both expansion opportunities. This was not appropriate as it was not a significant issue as the case specifically asked which of the two options was the most profitable. This appears to have limited the time you had to address the other, more significant, requests and issues.

Did the response appear balanced?No

You appear to have run out of time on this case. This prevented you from obtaining sufficient depth in some of the request. It is important to plan your time on each case and ensure you allocate a sufficient amount of time to each of the significant issues.


35 / 49

Section B: Assessment By Competency Area


36 / 49

Section B: Assessment By Competency AreaThe weaknesses the reviewers identified for each simulation have been re-sorted and presentedhere, by competency area, with the depth areas (Financial Reporting and Management Accounting)shown before the breadth areas (Audit and Assurance, Taxation, Strategy and Governance, andFinance). Within each competency area, the weaknesses are listed by enabling skill. The detailedreviewer comments have not been repeated in Section B. Please refer to Section A to see thedetailed comments.

Financial ReportingDay 2 - Assurance - TankCo

Assessment Opportunity #1 (FR)Your discussion of the revenue recognition issue demonstratedtechnical errors. X Analyze Major Issue

(s)-Qualitative

Assessment Opportunity #6 (FR)Your discussion of the impairment issue demonstrated technicalerrors. X Analyze Major Issue

(s)-Qualitative

Day 3 - Case #2 - Dogani Inc.

Assessment Opportunity #1 (FR)Your discussion of the non-monetary transaction issue lacked depth(i.e. use of case facts, technical knowledge, etc.). X Analyze Major Issue

(s)-Qualitative

Day 2 - Assurance - TankCo


The candidate discusses the accounting treatment for the lawsuits.


Audit and AssuranceDay 2 - Assurance - TankCo

Assessment Opportunity #7 (AS)You did not identify a sufficient number of the relevant engagementissues. X Assess the Situation


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Assessment Opportunity #13 (AS)You did not identify a sufficient number of valid reporting options.

X Assess the Situation


Assessment Opportunity #7 (AS)Your discussion of the engagement issues included technical errors.


Assessment Opportunity #8 (AS)You identified several risk factors but your discussion of the factorslacked depth. X Analyze Major Issue

(s)-Qualitative

Assessment Opportunity #9 (AS)You attempted to discuss the overall audit approach but your responselacked depth. X Analyze Major Issue

(s)-Qualitative

Assessment Opportunity #10 (AS)You attempted an analytical review but your response lacked depth.


Assessment Opportunity #11 (AS)You provided several audit procedures, but your response lackeddepth. X Analyze Major Issue

(s)-Qualitative

Assessment Opportunity #13 (AS)You identified a sufficient number of valid reporting options, but yourresponse lacked depth. X Analyze Major Issue

(s)-Qualitative


Assessment Opportunity #3 (AS)Your discussion of the factors you identified that would affect the riskof material misstatement for this audit lacked depth (i.e. use of casefacts, impact, etc.).



38 / 49

Assessment Opportunity #4 (AS)Your discussion of the suggested audit approach and/or materialitylacked depth (i.e. use of case facts, technical knowledge, etc.). X Analyze Major Issue

(s)-Qualitative


Assessment Opportunity #13 (AS)You discussed a sufficient number of valid reporting options, but youeither did not recommend a particular report or your recommendationwas inappropriate.

X Conclude and Advise

Management AccountingDay 3 - Case #1 - Play

Assessment Opportunity #1 (MA)Your quantitative analysis of the pricing alternatives containedtechnical errors. X Analyze Major Issue

(s)-Quantitative

You did not compare the pricing alternatives to the status quo. X Analyze Major Issue

(s)-Quantitative

Assessment Opportunity #2 (MA)You did not properly incorporate the concept of one-time costs intoyour analysis. X Analyze Major Issue

(s)-Quantitative

Your quantitative analysis of the cost of outsourcing the sanitizationprocess and keeping it in-house contained technical errors. X Analyze Major Issue

(s)-Quantitative


Assessment Opportunity #6 (MA)Your quantitative analysis of the make versus buy decision containedtechnical errors. X Analyze Major Issue

(s)-Quantitative

Day 3 - Case #3 - Culinary Crawl



39 / 49

Your calculation of the number of customers needed to replace Ivy'semployment income contained technical errors. X Analyze Major Issue

(s)-Quantitative

Day 3 - Case #1 - Play

Assessment Opportunity #1 (MA)You did not provide a conclusion that was consistent with youranalysis. X Conclude and Advise





TaxationDay 3 - Case #1 - Play


The candidate discusses the sale of the Wright family's Toronto home.



Assessment Opportunity #5 (TAX)Your discussion of the tax issues lacked depth (i.e. use of case facts,technical knowledge, etc.). X Analyze Major Issue

(s)-Qualitative


Assessment Opportunity #1 (TAX)Your calculation of the business income for tax purposes containedtechnical errors. X Analyze Major Issue

(s)-Qualitative

Finance


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Day 3 - Case #1 - Play

Assessment Opportunity #6 (FIN)Your discussion of the investment options lacked depth (i.e. use ofcase facts, technical knowledge, etc.). X Analyze Major Issue

(s)-Qualitative

You did not provide a balanced analysis of the risks and rewards for allof the investment options. X Analyze Major Issue

(s)-Qualitative


Assessment Opportunity #6 (FIN)Your discussion of the mortgage interest rate lacked depth (i.e. use ofcase facts, impact, technical knowledge, etc.). X Analyze Major Issue

(s)-Qualitative

Your discussion of Ivy's debt structure lacked depth (i.e. use of casefacts, impact, etc.). X Analyze Major Issue

(s)-Qualitative


Assessment Opportunity #2 (FIN)You did not address a sufficient number of items that Gale isproposing to give to the bank in your discussion. X Assess the Situation

Strategy and GovernanceDay 3 - Case #3 - Culinary Crawl

Assessment Opportunity #4 (GOV)You did not address a sufficient number of pros and cons in youranalysis. X Assess the Situation


Assessment Opportunity #7 (GOV)You did not integrate a sufficient number of analyses in yourdiscussion. X Analyze Major Issue

(s)-Integrate Situation


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Section C: General Findings and CPA Enabling Skills


42 / 49

Section C: General Findings and CPA Enabling SkillsOverall Comments

Was the response well organized with a logical flow?

YesDay 2 - Assurance - TankCo

Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case. You provided good structure while responding to the requests. For example, your use of the weakness, implication, recommendation structure ensured that you obtained sufficient depth in your control weaknesses analysis.

YesDay 3 - Case #1 - Play

Your response was well organized and easy to follow. You used headings and separated your discussions by each issue addressed, which was a logical way to respond to this case.

YesDay 3 - Case #2 - Dogani Inc.

Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case.

YesDay 3 - Case #3 - Culinary Crawl

Your response was well organized and easy to follow. You used headings and separated your discussions by assessment opportunity, which was a logical way to respond to this case. In addition, you provided good structure while responding to the requests. For example, your use of the weakness, implication, recommendation structure ensured that you obtained sufficient depth in your control weaknesses analysis.

Did the candidate focus their response on the appropriateissues?

YesDay 2 - Assurance - TankCo


NoDay 3 - Case #1 - Play

You did not answer the question on the sale of the house.


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NoDay 3 - Case #3 - Culinary Crawl

You spent time discussing the qualitative aspect of both expansion opportunities. This was not appropriate as it was not a significant issue as the case specifically asked which of the two options was the most profitable. This appears to have limited the time you had to address the other, more significant, requests and issues.

Did the candidate understand their role?YesDay 2 - Assurance - TankCo

You appeared to have understood your role as the auditor and addressed the partner's requests appropriately.

NoDay 3 - Case #1 - Play

You did not always provide Sam and Sarah, the users, with sufficient information to respond to all their needs. For example, you did not answer the question on the sale of the house and your analysis on the investment opportunity is weak.


You appear to have understood your role as an auditor and addressed all of the assessment opportunities from the right perspective.


You did not appear to have understood your role as an advisor at a local accounting firm. You did not always provide Ivy, the user, with sufficient information to respond to her needs.

Did the response appear balanced?YesDay 2 - Assurance - TankCo





44 / 49


Your response was well-balanced and you seemed to have allocated an appropriate amount of time to each of the assessment opportunities. However, your response was only 4 pages in length, which is significantly shorter than the average response length in this case, and was not enough to sufficiently address all of the requireds. It is important to plan your time on between cases and ensure you allocate a sufficient amount of time to each of the significant issues within a case.


You appear to have run out of time on this case. This prevented you from obtaining sufficient depth in some of the request. It is important to plan your time on each case and ensure you allocate a sufficient amount of time to each of the significant issues.

Was the response easy to read and understand?YesDay 2 - Assurance - TankCo

Your response was written efficiently and was easy to read and understand. You used point form but your thoughts were usually complete and clear.


Your response was written efficiently and was easy to read and understand. You used point form and complete paragraphs which allowed you to provide thoughts that were complete and clear].


Your response was written efficiently and was easy to read and understand. You used a combination of point form and complete paragraphs which allowed you to provide thoughts that were complete and clear. You did not use an exhibit for your quantitative analysis. Exhibits can be a good way to show your calculations, if they contain a statement of purpose to help you stay focused, contain notes that reference adjustments in your exhibits to explanations and a conclusion to summarize the results of your quantitative analysis. This can be very helpful in understanding your calculations.


Point form was used throughout your response and this sometimes limited the depth of your discussions. For example, you wrote, ''You might want to consider leveraging yourself agains the multiple debts that you have''. You should ensure that you always provide a complete discussion to clearly present your thoughts, even when using point form.


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CPA Enabling SkillsAssess the Situation

Day 2 - Assurance -TankCo AO #3 FR


The candidate discusses the accounting treatment for thelawsuits.

YOU DID NOT ADDRESS THIS ASSESSMENT OPPORTUNITY. X

Day 2 - Assurance -TankCo AO #7 AS

You did not identify a sufficient number of the relevantengagement issues.

X


You did not identify a sufficient number of valid reporting options.

X

Day 3 - Case #1 - Play AO #4 TAX


The candidate discusses the sale of the Wright family's Torontohome.


Day 3 - Case #2 -Dogani Inc. AO #2 FIN

You did not address a sufficient number of items that Gale isproposing to give to the bank in your discussion.

X

Day 3 - Case #3 -Culinary Crawl AO #2 MA




Day 3 - Case #3 -Culinary Crawl AO #4 GOV

You did not address a sufficient number of pros and cons in youranalysis.

X

Analyze Major Issue(s)-QualitativeDay 2 - Assurance -TankCo AO #1 FR

Your discussion of the revenue recognition issue demonstratedtechnical errors.

X


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Day 2 - Assurance -TankCo AO #6 FR

Your discussion of the impairment issue demonstrated technicalerrors.

X


Your discussion of the engagement issues included technicalerrors.

X


You identified several risk factors but your discussion of thefactors lacked depth.

X


You attempted to discuss the overall audit approach but yourresponse lacked depth.

X


You attempted an analytical review but your response lackeddepth.

X


You provided several audit procedures, but your response lackeddepth.

X


You identified a sufficient number of valid reporting options, butyour response lacked depth.

X

Day 3 - Case #1 - Play AO #6 FIN

Your discussion of the investment options lacked depth (i.e. use ofcase facts, technical knowledge, etc.). X

Day 3 - Case #1 - Play AO #6 FIN

You did not provide a balanced analysis of the risks and rewardsfor all of the investment options. X

Day 3 - Case #2 -Dogani Inc. AO #1 FR

Your discussion of the non-monetary transaction issue lackeddepth (i.e. use of case facts, technical knowledge, etc.).

X


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Day 3 - Case #2 -Dogani Inc. AO #3 AS

Your discussion of the factors you identified that would affect therisk of material misstatement for this audit lacked depth (i.e. use ofcase facts, impact, etc.). X

Day 3 - Case #2 -Dogani Inc. AO #4 AS

Your discussion of the suggested audit approach and/ormateriality lacked depth (i.e. use of case facts, technicalknowledge, etc.). X

Day 3 - Case #2 -Dogani Inc. AO #5 TAX

Your discussion of the tax issues lacked depth (i.e. use of casefacts, technical knowledge, etc.).

X

Day 3 - Case #3 -Culinary Crawl AO #1 TAX

Your calculation of the business income for tax purposescontained technical errors.

X

Day 3 - Case #3 -Culinary Crawl AO #6 FIN

Your discussion of the mortgage interest rate lacked depth (i.e. useof case facts, impact, technical knowledge, etc.).

X

Day 3 - Case #3 -Culinary Crawl AO #6 FIN

Your discussion of Ivy's debt structure lacked depth (i.e. use ofcase facts, impact, etc.).

X

Analyze Major Issue(s)-QuantitativeDay 3 - Case #1 - Play AO #1 MA

Your quantitative analysis of the pricing alternatives containedtechnical errors. X

Day 3 - Case #1 - Play AO #1 MA

You did not compare the pricing alternatives to the status quo. X


You did not properly incorporate the concept of one-time costsinto your analysis. X


Your quantitative analysis of the cost of outsourcing thesanitization process and keeping it in-house contained technicalerrors.

X


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Day 3 - Case #2 -Dogani Inc. AO #6 MA

Your quantitative analysis of the make versus buy decisioncontained technical errors.

X

Day 3 - Case #3 -Culinary Crawl AO #3 MA

Your calculation of the number of customers needed to replaceIvy's employment income contained technical errors.

X

Analyze Major Issue(s)-Integrate SituationDay 3 - Case #3 -Culinary Crawl AO #7 GOV

You did not integrate a sufficient number of analyses in yourdiscussion.

X

Conclude and AdviseDay 2 - Assurance -TankCo AO #13 AS

You discussed a sufficient number of valid reporting options, butyou either did not recommend a particular report or yourrecommendation was inappropriate. X


You did not provide a conclusion that was consistent with youranalysis. X


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