Unit of competency details

Elements and Performance Criteria 

Element 

Performance Criteria 

1

Review data

1.1

Costs of, and returns from, assets and liabilities are analysed using standard accounting techniques  to identify extent of debt and equity financing

1.2

Data  identifies costs of different forms of capital to the organisation

1.3

Asset and liability  estimates and valuation criteria  are standardised and regularly adjusted in line with changes to environmental factors 

2

Determine options

2.1

Long and short term periods  are established for the organisation by reference to strategic goals , cash flow requirements and operational objectives

2.2

Long term financing requirements are identified and costed in line with the organisation's expected revenue returns, cash flows and asset base

2.3

Sources of financing  are researched and evaluated to determine compatibility with the organisation's finance strategy

2.4

Investment analysis and financial planning requirements are identified and analysed

3

Implement strategies

3.1

Financial plans are structured to meet strategic goals and provide returns within long and short term operational objectives

3.2

Short and long term objectives  for organisation's capital structure are developed in line with operational and strategic plans

3.3

Internal control procedures  are established in consultation with stakeholders to support implementation and to meet possible emergencies

3.4

Portfolio management techniques are applied

4

Evaluate outcomes

4.1

Interrelationships between long and short term objectives are monitored to ensure consistency of returns between operational and investment plans

4.2

Costs and returns are assessed to determine ongoing viability of strategy

4.3

Tax efficiency of financial strategy is regularly reviewed to maintain optimal returns from assets

REQUIRED KNOWLEDGE &SKILLS 

Knowledge requirements include :

principles of risk management and budgetary control

methods of storing, recording and updating financial information

financial legislation (eg taxable transactions, reporting requirements)

ethical considerations for compliance

understanding of organisational structures and lines of management authority

principles of cost-benefit analysis and use of forecasting techniques

principles of internal control (including statutory requirements)

methods of financial evaluation

Skills requirements include :

interpersonal skills and communication skills (eg liaising, listening, consulting)

report writing, preparation and formatting

reading and interpreting financial statements and reports

planning skills for timetabling and scheduling reports and lodgements

research skills to identify valuations and applicable professional standards

EVIDENCE GUIDE 

Assessment of performance requirements in the unit should be undertaken in an industry context. The Evidence Guide identifies the critical aspects, knowledge and skills to be demonstrated to confirm competency for the unit. Competency is demonstrated by performance of all stated criteria including the Range Statement applicable to the workplace.

Overview of assessment requirements 

To achieve competency in this unit, a person must be able to demonstrate:

knowledge of standard accounting techniques

knowledge of internal control procedures

knowledge of organisation's strategic goals

knowledge of environmental factors

ability to review data

ability to determine options

ability to implement strategic strategies

ability to evaluate outcomes

Critical aspects of evidence 

Evidence required for demonstration of consistent performance :

Competence in this unit must be assessed over a period of time in order to ensure consistency of performance over the Range Statement and contexts applicable to the work environment.

Delivery /assessment relationship to other units :

Prerequisite units:

FNSACCT503B Manage budgets and forecasts.

Assessment requirements 

Method of assessment :

For valid and reliable assessment of this unit, evidence should be gathered through a range of methods to indicate consistent performance.

Assessment of this unit of competence will usually include observation of processes and procedures, oral and/or written questioning on underpinning knowledge and skills and other methods as required.

Context of assessment :

Assessment of performance requirements in this unit should be undertaken within the financial services industry context and should cover aspects of personal/financial responsibility and accountability.

Aspects of competency, including the attainment of relevant knowledge and skills, may be assessed in a relevant workplace, a closely simulated work environment, or other appropriate means that clearly meet industry competency requirements.

Resources required for assessment :

Assessment of this unit of competence requires access to suitable resources to demonstrate competence.

Assessment instruments, including personal planner and assessment record book.

Access to registered provider of assessment services.

The Range Statement relates to the unit of competency as a whole. It allows for different work environments and situations that will affect performance.

The following variables may be present with training and assessment depending on the work situation, needs of the candidate, accessibility of the item, and local industry and regional contexts. If bold italicised  text is shown in Performance Criteria, details of the text are provided in the Range Statement.

Standard accounting techniques  may include:

discounted cash flows

Internal Rate of Return, Net Present Value

deprival asset valuations

rates of return

pay back break even periods

impact statements

pro-rata and percentage apportionment

direct and indirect allocation

Data may include :

budgets and forecasts

financial statements and reports

market valuations

Australian Bureau of Statistics (ABS) economic data

financial markets monitoring services (eg Reuters)

credit ratings

reserve bank of Australia long term bond rates

Assets and liabilities  may include:

property investments

shares, debentures, securities

loans, leases, debts

plant and equipment

employee liabilities (eg long service leave)

cash

computer software

stock and account receivable

Valuation criteria  may include:

depreciation rate

market estimates

purchase prices

repayment costs

director's valuation

asset backing

earning capacity

past profits

expected future profits

receiver's valuation

Environmental factors  may include:

economic conditions and trends

external risks

competitors' behaviour

market share

consumer demand

cost of capital

skills shortages

government financial policies

factor markets

Long and short term periods  may include:

monthly accounting

quarterly reports

half yearly budgets

annual reporting

tri-annual funding

five year plans

Strategic goals  may include:

survival

short term profit

long term profit

liquidity

solvency

growth

market share

Sources of financing  may include:

'plough back'

money market

asset sales

bank borrowing (long and short term)

franchising

venture capital

new share releases

government equity injections

debentures

Short and long term objectives  may include:

debt retirement

salaries and other employee obligations

periodic payments (eg leases, loans)

taxation payments

superannuation

dividends

Internal control procedures may include :

identification, measurement and recording of revenue, assets, expenditure, liabilities and equity

safeguarding and insurance of assets

decision making authorities

accuracy in valuations

transparency in financial reporting

risk management strategies

corporate governance requirements

control of cash