Repeat Writers: What Went Wrong During the CFE?

There is no question it is disheartening to fail the CFE, but take solace in the fact that thousands of students over the years are now CPAs and they did not pass the first time around. This is a bit of a game, and playing it right makes all the difference. 

But before we focus on what to do next (See: Repeat Writers - How to Prepare for a 2nd Attempt), let's understand what went wrong this past September. 

CPA provides a one-pager that gives you a brief summary of how you did on the different levels of the exam.  For this to make sense, you need to understand the levels, so let's go through each one.

Level 1 – Sufficiency

This level will say "pass" if you passed or "fail" if you were unsuccessful and give you a decile between one and 10.  For this level, CPA looks at how many times you scored "reaching competent" or "competent"/"competent with distinction" across all the Assessment Opportunities in Days 2 and 3, and if you "scored" enough, i.e. got enough RCs and Cs/CDs in total, you pass Level 1.  That is why it is called "Sufficiency" – you have to be "sufficiently competent" across the board on Days 2 and 3 to get through Level 1. 

If you fail, you will get a decile and the higher the better. For example, a two means you needed a few more RCs or Cs (maybe two?) across all the assessment opportunities, while a seven means you needed a bunch more.  If you get a one you just missed the minimum necessary to pass by a hair's breadth.

Practical implication - If you pass this level, your case writing may be decent across the board and your weakness may be specifically related to one or more competency in level 2 or 3.  If you fail this level, you need some technical (most likely) and case writing (for sure) help.

Level 2 – Depth in Financial Accounting and Management Accounting

For Level 2, you need to score a certain number of "competents" or "competents with distinction" in either financial accounting OR management accounting (you don't need both).  How many Cs/CDs?  This is a highly guarded secret, but let's guess that if for example there are 7 assessment opportunities, in financial accounting, that you might need between 4 or 5 Cs/CDs.  The same would be true for management accounting.  Once you get the minimum number, your good and it does not matter for this level what you score on the remaining AO for the purpose of Level 2.

Practical Implication - This level tells you how you did in both financial accounting and management accounting.  If you failed both you need help in scoring competent in these areas.  For financial accounting, the issue may be the level of your technical knowledge or your ability to apply that knowledge to a case.  For management accounting, although the issue may be technical, given that management accounting is largely quantitative, the problem may relate more to the way you are doing the quants.

Level 3 – Depth in Role (Day 2)

This is pretty simple.  You chose a role for the Day 2 comp - say assurance.  Based on historical experience there are about 7 or 8 AOs on the comp for each role.  You needed to score "Competent"/"Competent with Distinction" several times to pass this level. 

Practical Implication - If you failed this level, you need help in whatever role you chose.  It means you simply are having problems getting "competent" in that competency, which could be a technical problem, case writing problem or both.  Alternatively you may wish to consider choosing another role for the next CFE, especially if you were unsuccessful more than once.

Level 4 – Breadth

This level focuses on whether you achieved breadth across the competencies.  You would demonstrate breadth by getting a minimum of RC a certain number of times across all competencies.  We would estimate that for all competencies except for management accounting and financial reporting that 1 or 2 AOs with a minimum of RC would be good enough to pass this level.  

Practical Implication - If you have a fail in a given competency, you definitely have a weakness in that area as it means the competency probably showed up a number of times, and you may have obtained "nominal" or "not addressed" every time or at least almost every time.  Obviously, this needs to be worked on, as the standard to get RC is not high, and you should not be missing it on a regular basis.

So, the bottom line is that you should look at this page closely and use it to help you zero in on your weaknesses. 

How do you move forward?  Check out our next blog, Repeat Writers: How to Prepare for a 2nd Attempt.  And don't despair, with the right game plan in place, you can definitely do it!

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