accounting alignment - nzceta€¦ · web viewa bank reconciliation statement is no longer...

Rationale behind the new Accounting Matrix

Accounting is a subject which has the means to produce creative, enterprising young people who will seize the opportunities offered by new knowledge and technologies to secure a sustainable social, cultural, economic, and environmental future for our country.

Accounting is a senior subject that begins at Level 1 NCEA and the knowledge gained at Level 1 is built on through Levels 2 and 3. Therefore it is important that there is cohesiveness in the standards between the levels to reflect the nature of the teaching and learning in secondary schools.

For a successful outcome in Accounting, one of the essential skills that students require is a strong understanding of the accounting cycle (inputs, processes through to outputs). These processing and reporting skills need to be learnt thoroughly before the detail of the processing and reporting for companies (namely reporting entities) can be understood (which includes a basic understanding of the New Zealand Equivalent of the International Financial Standards).

The following shows the build up through the levels:

Level 1

1.1 Describe the conceptual basis of accounting External 4 credits

This is an external assessment on the conceptual basis of accounting at an introductory level.

Students will be able to prepare text using the language learnt based on the conceptual basis of accounting. (Using language, symbols and texts)

This is based on ‘an introduction to the conceptual basis of accounting’. (AO Level 6)

1.2 Process cash transactions for an entity Internal 4 credits

This is an internal assessment that can be completed manually or using a computer spreadsheet. The entity will be a GST registered entity so there is a considerable amount of learning to be done here.

NZCETA Accounting Alignment – Overview Matrix Consultation

This is based on process basic transactions into journals; post journals into ledgers and prepare a trial balance’. (AO Level 6)

The best method of assessment for this achievement objective is internal due to the fact that a complete set of basic transactions need to be processed into a complete set of ledger accounts to give a thorough assessment of the process rather than a time limited ‘extract’ of the system approach that has to happen if completed externally in one hour.

Students who complete this standard are able to use language, symbols and texts to make meaning of the Accounting ‘code’ (accounting equation and debits and credits).

Also students who prepare the assessment using ICT will be able to show that they can confidently use ICT to access and provide information. (using language, symbols, and texts)

This assessment should be based on an entity that has meaning for students and connects with their wider lives (community engagement). For example the entity could be a marae or other community organisation.

1.3 Prepare financial statements for a sole proprietor registered for GST on the payment basis External 5 credits

This is an external assessment on the preparation of financial statements of a small business. There is a large amount of teaching/learning time required in this topic. We would see it including Income Statement; Balance Sheet; Cash Flow Statement; Bank Reconciliation Statement and balance day adjustments (including GST). The Bank Reconciliation Statement has been moved to this standard from the current 90025 internal assessment. Thus, explaining why this standard is to remain at five credits

Students will be required to adjust the trial balance for the balance day adjustments before preparing the financial statements in order to achieve with Merit or Excellence. Merit students will be able to include the straightforward balance day adjustments and Excellence students will be able to include the complex balance day adjustments.

This standard is based on ‘process balance day adjustments and ‘prepare financial statements’. (AO Level 6)

Being able to prepare financial statements means that students can participate and contribute in their communities by helping local businesses or even community organisations with the preparation of financial statements (participating and contributing)


1.4 Interpret accounting information for a sole proprietor External 4 credits

This is an external assessment that requires learners to study a case study, where all analysis information is given and then write up paragraph(s) based on that case study.

This assessment will assess thinking skills which enables students to understand processes that can be applied to a situation – in this case the case study of a sole proprietor. (Thinking)

This standard is based on ‘analyse and interpret financial statements’. (AO Level 6)

1.5 Prepare and use information for individual financial decision making Internal 4 credits

This is an internal assessment which requires students to apply a given situation to their previous learning on how to make a financial decision (including preparing financial information for an individual before making the decision). This will encourage learners to be ‘future focussed’ as the decision could be one that they come across now or in the future; therefore having the skills to prepare the information needed before making a decision is an important skill.

This standard is based on ‘understand the current and future implications of borrowing, saving and investment’ (AO Level 6)

This assessment has the potential to engage students in real decisions. For example, these decisions could include evaluating the options for financing the purchase of a car / other issues of buying on credit / hire purchase / using credit cards wisely / getting a loan for a car / dealing with a student loan / getting a mortgage / Kiwisaver / investment options etc. It will include the preparation of a Statement of Affairs and budgets.

1.6 Investigate systems for managing cash for an entity Internal 3 credits

This internal assessment is based on the cash controls of an entity (preferably the student’s household). This will require the students to interact with the household formally in order to complete a questionnaire on the cash controls and financial documents of the household. Interacting with their household in this manner encourages community engagement and it also encourages them to be an effective user of the information from the questionnaire to prepare a report (connected – using an effective communication tool).


A Bank Reconciliation Statement is no longer prepared under this standard (moved to 1.3) and explains why this assessment has remained at 3 credits.

The level of achievement will be based on the quality of the information in the report.

This standard covers ‘understand the relevance of financial documents for an individual/household and understand and interpret the information on financial documents for an individual/household’. (AO Level 6)

Unit Standard 7373 Prepare financial statements for a community organisation 4 credits

A unit standard based on the Level 2 standard 7373 will be written at this level to cover the preparation of financial statements for community organisations

This standard will be based on ‘report basic transactions for an entity’. (AO Level 6). The entity in this case being a community organisation.

This standard will encourage students to be actively involved in their communities. The assessment could be based on a community organisation locally that the students visit/interview. Also having the knowledge on how to prepare financial statements for a community organisation enables students to participate and contribute in their communities by being the treasurer for a local community organisation.

The context of this assessment could be a marae or other cultural-based entity, enabling students to be ‘young people who will work to create an Aotearoa New Zealand in which Maori and Pakeha recognise each other as full Treaty Partners, and in which all cultures are valued for the contributions they bring’. (vision – what we want for our young people)


Level 2

2.1 Apply the conceptual basis of accounting in context. External 4 credits

This external assessment is a significant step up from Level 1 as at this level students must use their knowledge of the conceptual basis of accounting to apply it to a specific entity.

Students will be able to prepare text using the language learnt based on the conceptual basis of accounting. (Using language, symbols and texts)

This standard is based on ‘Understand and apply the conceptual basis of accounting’ (AO Level 7)

2.2 Process financial transactions for all subsystems of a trading entity using a perpetual inventory systemInternal 6 credits

This is assessed internally for similar reasons as to why AS 1.2 is internal. Again the best method of assessment is for students to complete a full set of transactions to mirror what would happen in the community. This assessment will cover the subsystems of Accounts Receivable; Property, Plant and Equipment, Cash and Inventory

This standard will involve students setting up a trading entity that uses a perpetual inventory system and completing a range of transactions for that entity.

This assessment is assessing ‘process complex transactions into journals with an emphasis on subsystems; post journals into ledgers including subsidiary ledgers; prepare a trial balance and prepare and process balance day adjustments with an emphasis on subsystems’. (AO Level 7)

This assessment will be able to be completed manually or using a computer spreadsheet.

Achievement with merit and excellence will be determined based on the type of certain complex transactions able to be processed.

This assessment should be based on a trading entity that has meaning for students and connects with their wider lives (community engagement).

Students who prepare the assessment using ICT will be able to show that they can confidently use ICT to access and provide information. (using language, symbols, and texts)

This internal assessment would require a large amount of teaching and learning time hence the requirement for it to be six credits.


“Should this standard be able to be assessed by using computer accounting software?” – We invite feedback on whether this should be assessed by using computer software

2.3 Prepare financial statements for a sole proprietor registered for GST on the invoice basis External 5 credits

This is an external assessment on preparing financial statements with more complex balance day adjustments than that at Level 1 and with an emphasis on transactions for subsystems. Balance day adjustments and other transactions will be incorporated into the financial report.

To achieve the standard the students will need to be able to process the straightforward balance adjustments (a significant step up from Level 1). Achievement with Merit or Excellence will depend on the processing of certain complex balance day adjustments (ie. different complex adjustments required for merit and then excellence). Higher level thinking and/or understanding (Merit and Excellence) can be assessed through how the adjustments are made and worded.

This standard covers ‘prepare financial statements and process balance day adjustments with an emphasis on subsystems’. (AO Level 7)

2.4 Prepare a report that interprets accounting information for an entity Internal 5 credits

This is an internal assessment that requires writing a report that interprets the analysed information (both financial and non-financial) from an entity. The report will require students to make recommendation(s) to the entity based on the analysed information and their interpretations. The level of achievement will depend on the quality of the interpretations and the recommendations made.

This assessment should be based on an entity that has meaning for students and connects with their wider lives (community engagement).

This standard is based on ‘analyse and interpret financial statements’. (AO Level 7)

Students who can complete this standard will show that they are able to use their thinking skills to make sense of the information provided. (thinking)

2.5 Prepare a report on how an entity manages and safeguards its assets Internal 4 credits


This internal assessment covers the internal controls used in an entity to protect and safeguard its assets, mainly cash and inventory.

This assessment should be based on an entity that has meaning for students and connects with their wider lives (community engagement).

Students having to interview an entity in their community means that they need to relate to others in a business context. They will need to approach the business sensitively to ensure confidentiality ensuring that they understand that different situations require different roles. (Relating to others)

Interviewing a local entity also requires students to make plans and have a strategy for meeting the challenge of interacting with an entity. (managing self)


Level 3

3.1 Apply the conceptual basis of accounting for external reporting purposes External 4 credits

This external assessment assesses the conceptual basis of accounting for external reporting purposes which involves an in-depth understanding of the NZ Framework and how it applies to reporting entities.

This enables students to go on to achieve the AO Level 8 of ‘process report and interpret information for external reporting, underpinned by the conceptual basis of accounting’. Students who are able to complete this standard will be able to use the language of the NZ Framework and communicate that information and their ideas based on the framework. (using language, symbols, and texts)

3.2 Process financial transactions for a company Internal 4 credits

This is an internal assessment on the preparation of journals and ledgers for a reporting entity. This assessment involves students being able to prepare journals and ledgers for select transactions that a company would entail. These transactions are mostly unique to a company and so are very different from Level 1 and 2. This assessment could entail a complete set of transactions entered into the general journal and ledgers for a company. Only the general journal format would be assessed for all transactions of the company (not the formats of the other 6 journals). The differentiation between the grades Achievement, Achievement with Merit and Achievement with Excellence will be based on the different types of transactions processed for the company. The increase to four credits is to better reflect the notional learning time required, and the likelihood that making this an internal assessment may require students to process more information relating to a company

This standard is based on ‘process information for external reporting’. (AO Level 8)

3.3 Prepare financial statements for a reporting entity External 6 credits

This is an external assessment that covers the financial statements that a reporting entity is legally obligated to prepare. This is able to be assessed in full statement and extract form so therefore fits into a one hour plus assessment.

Students who are able to prepare financial statements for a reporting entity obviously also have an understanding of these statements which means that they can be participants in a discussion about the statements of a reporting entity (Actively involved – participants in a range of life contexts).

The level of achievement of this standard will be based on the level of the adjustments able to be incorporated into the financial statements.


This standard is based on ‘report financial information for external reporting’. (AO Level 8)

This standard would involve a great deal of teaching time so 6 credits are required.

3.4 Prepare a report that interprets a reporting entity’s annual report for external users Internal 6 credits

This is an internal assessment that involves students preparing a report based on their interpretations of an annual report.

Having a clear understanding of how to interpret a published annual report enables students to be future focussed and to be critical thinkers.

This assessment should be based on an entity that has meaning for students and connects with their wider lives (community engagement). This will also encourage their intellectual curiosity (thinking).

This standard is based on ‘interpret information for external reporting’. (AO Level 8)

Students need a wide range of financial and non-financial information and time to think about the interpretations. Students would also be required to research the company their report is on.

There is a significant amount of time required for this standard.

3.5 Prepare and interpret information to make an effective management decision Internal 4 credits

This is an internal assessment which requires students to apply a given situation to their previous learning in order to make a financial decision that management of a company would face (preparing financial information for management before making the decision). This will encourage learners to be ‘future focussed’ and to have ‘high expectations’ as the decision could be one that they come across in the future if working in a management position.

This standard is based on ‘process, report and evaluate financial and non-financial information to enable internal users to make decisions’. (AO Level 8)


Unit Standard 7375 Prepare accounting records and financial statements for partnerships 3 credits

A unit standard will be written based on parts of the explanatory notes for both the current Level 3 Achievement Standards 90501 and 90503. This standard is to cover the processing and reporting of financial information for partnership accounting.

This standard allows teachers to assess partnership accounting which is no longer covered in any of the new Level 3 Achievement Standards.

Unit Standard 7379 Process financial information for a manufacturing job cost subsystem3 credits

A unit standard based on the current Level 3 Achievement Standard 90502 will be written. This standard is to cover the processing of job cost information and its implications i.e. using the processed information related to job costing to make an effective management decision.

This standard will be based on ‘process, report and evaluate financial and non-financial information to enable internal users to make decision’. (AO Level 8).

Having the knowledge on how a manufacturing job cost subsystem operates enables students to participate and contribute in their communities by being able to understand the importance of obtaining quotes for any job requested (e.g. repairs to a car / custom-made furniture) and how that quote is calculated.


Unit Standards

Personal Financial Management Unit StandardsThese unit standards have been investigated and there is no duplication between these standards and any of the Accounting achievement standards or unit standards.

Current Accounting Unit StandardsUnit Standard Action

recommendedReasons why

Level 17359 Delete Duplication with new 1.1 – especially elements 1

and 2 7360 Delete Duplication with new 1.2 – especially element 27361 Delete Duplication with new 1.1 and 1.37362 Delete Duplication with new 1.47363 Delete Duplication with new 1.2 – especially element 17364 Delete Duplication with new 1.5 and 1.67365 Move this standard to

the Business domainThis standard is outside the scope of the Accounting curriculum

Level 27366, 7367, 7368, 7369, 7370, 7371

Delete or move to Business domain

These are predominantly focussed on the book-keeping for each sub-system – no longer what Accounting is about. Sub-systems are now covered across the Accounting strands in the standards 2.2 and 2.3.These could be moved to the Business domain as may have some relevance there.

7372 Delete Duplication with 2.37373 Rewrite to make it a

Level 1 unit standardThis standard is based on the context of community organisations – best suited to Level 1.

Level 37374 Make available for

use outside of schools only

Duplication with 3.1

7375 Keep Assesses partnership accounting which is no longer covered in the achievement standards. May need minimal alterations to update the standard.

7376 Delete Duplication with 3.1 and 3.27377 Delete Duplication with 3.1 and 3.37378 Make available for

use outside of schools only


7379 Keep Element 1 is outside the scope of the Accounting curriculumThis Unit Standard will need to be rewritten and will be based on the current 90502 standard

7380 Make available for use outside of schools only



The NZQA principles indicate that appropriate external assessment requires a minimum of one hour. Therefore the standards that are assessed internally are assessed in this manner due to students requiring more than one hour to complete the assessment. The assessment of processing financial transactions is best completed over a period of time in order for students to be able to use their understanding of the process to a more ‘real-life situation’ ie. a complete business and their transactions rather than ‘pieces’ of what a business does which is how an external assessment that is time-limited has to assess the material. This is often very confusing for students as they have learnt the complete process and this is what is done in real-life yet they are assessed externally on ‘snapshots’ of the process.

The assessment of partnerships has been removed from the achievement standards due to the fact that most entities in New Zealand are either sole proprietors or companies.

The assessment of Analysis and Interpretation has been changed to internal at both levels two and three (is currently only an internal standard at Level 3). The idea behind making this internal at these levels is to improve and therefore build up the skills of writing reports for both internal and external users on the analysis and interpretation of a business’s results. By having the time to spend time studying one business and its financial results, students will have a better understanding of the nature of analysis and interpretation. Currently this has not been done well externally due to time pressures, a piece-meal approach to a business rather than looking at the big picture and also students leaving the paper to last in their final examination. Therefore students will better develop their thinking skills – taking the knowledge gained to creatively and critically think about an entity’s information as they will have the time to do this more effectively. They will effectively reflect on their own learning, draw on their personal knowledge (especially if it is an entity they relate to) and challenge the basis of assumptions and perceptions. (thinking)Also students who are required to complete these assessments will be able to establish personal goals, manage projects and set high standards (managing self). They will also be able to act independently – once taught the analysis and interpretation material they will be able to relate it to a given situation. (managing self)

The Conceptual Basis external standards at all levels will have a focus on the New Zealand Framework and in addition to this, at all levels, the standards will include all of the theory from across the topics of that level. Enabling students to use the ‘language/theory of Accounting’ to produce written texts. These students will be competent users of the theory of Accounting and will be able to interpret the theory in a range of contexts. (using language, symbols, and texts)


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