CFA Level I curriculum 2017 – changes from 2016

04 / 08 / 2016
Category: Blog

The big update is Economics (though don’t get too fearful), but with a new reading in each of Ethics and Corporate Finance. Corporate Finance has lost a reading to make up.

Financial Reporting & Analysis has had minor updates on three readings: Understanding Income Statements, Long-Lived Assets, and Financial Reporting Quality. These are all pretty small and apart from one or two accounting standard changes you are unlikely to notice the difference.

The Study Session numbers have also been updated this year. Economics has fallen from three to two (don’t all cheer at once), with Corporate Finance increasing from one to two.

Let’s work our way up the list in order of impact, starting with the lightest.

Ethics: Ethics and Trust in the Investment Profession (Reading 1)

Your studies on Ethics now begin with this new descriptive reading on ethics and trust. Why is ethical conduct important? What’s the difference between behaviour that is ethical and behaviour that is legal? Can actions be one and not the other? (Answer: oh yes.) The reading describes how societal groups (including CFA Institute, surprisingly) have developed codes of ethics and standards of conduct, both of which are required by members of that group. In the case of the investment profession, CFA Institute require adherence to the rules not only by all members, but by all exam candidates. Yes, that’s you.

To what extent are we influenced by the actions of those around us? What are we supposed to do when faced with an ethical dilemma? The investment industry has faced so many headline-generating scandals in recent years. In many cases this is because it may be easy to manipulate a number on a screen. In other professions such as medicine and law the results of unethical behaviour are often far more immediate and tangible (e.g. life or death decisions or the results of a court case), compared to finance, where unethical decisions may have no apparent impact for several decades. Hence a four-step framework has been developed for ethical decision-making: a description of this makes up a substantial part of the reading and is very likely for exam questions.

Although this reading is far less intense than the detailed Standards, a decent overview puts you in the right state of mind.

Corporate Finance: Corporate Governance and ESG (Reading 34)

The 2016 reading on Corporate Governance has been replaced with the new reading, Corporate Governance and ESG: An Introduction.

Corporate governance describes the systems and controls by which companies are managed. Companies are run to provide benefits not only to shareholders, but also a far wider-ranging group of stakeholders. In most countries corporate governance is described through “best practice” rather than regulatory requirements. There are also wide variations from country to country – however global convergence seems to be creeping in the right direction.

The reading discusses each stakeholder group, alongside the various conflicts that affect each. How these conflicts are managed is described in depth. The board of directors, plus the various committees, are the subject of a substantial part of the chapter.

Finally Environmental, Social, and Governance factors (ESG) are described, as these are more and more frequently becoming requirements for investors.

Economics: Topics in Demand and Supply Analysis (Reading 14)

After a number of years of suffering a disproportionately long Economics section (not just you – we tutors have to teach it in not many hours!), the topic has shortened. The first three 2016 Microeconomics readings on Demand and Supply Analysis (Introduction, Consumer Demand, and the Firm) have been compressed into one pretty broad reading for 2017. The original three chapters remain as online resources for you and are described as “prerequisite readings”. This means that they are useful background, covering many areas that will help Reading 14 make sense, but not directly examinable. Our humble opinion is that there is substantial overlap: if you read the Prerequisite Three then Reading 14 will be fairly straightforward. We will, of course, cover the chapter from scratch, introducing new concepts where needed.

The last micro chapter from 2016 (The Firm and Market Structures) remains untouched in 2017, as do all the macro and the two global economics readings.

In conclusion, Economics has not changed much, but micro has been streamlined into “Useful But Not Examinable” and “Examinable But Quite Heavy Going Without Reading The Background First”.


All of the Quartic materials have been fully updated to reflect new content and any LOS updates, and of course as a candidate you have the full 2017 CFA curriculum.





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