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)
NZCETA Accounting Alignment – Overview Matrix Consultation
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).
NZCETA Accounting Alignment – Overview Matrix Consultation
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)
NZCETA Accounting Alignment – Overview Matrix Consultation
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 system
Internal 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.
NZCETA Accounting Alignment – Overview Matrix Consultation
“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
NZCETA Accounting Alignment – Overview Matrix Consultation
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)
NZCETA Accounting Alignment – Overview Matrix Consultation
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.
NZCETA Accounting Alignment – Overview Matrix Consultation
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)
NZCETA Accounting Alignment – Overview Matrix Consultation
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 subsystem
3 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 nonfinancial 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.
NZCETA Accounting Alignment – Overview Matrix Consultation
Unit Standards
Personal Financial Management Unit Standards
These 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 Standards
Unit Standard
Action
recommended
Level 1
7359
7360
7361
7362
7363
7364
7365
Level 2
7366, 7367,
7368, 7369,
7370, 7371
7372
7373
Level 3
7374
7375
7376
7377
7378
7379
7380
Reasons why
Duplication with new 1.1 – especially elements 1
and 2
Delete
Duplication with new 1.2 – especially element 2
Delete
Duplication with new 1.1 and 1.3
Delete
Duplication with new 1.4
Delete
Duplication with new 1.2 – especially element 1
Delete
Duplication with new 1.5 and 1.6
Move this standard to This standard is outside the scope of the
the Business domain Accounting curriculum
Delete
Delete or move to These are predominantly focussed on the bookBusiness domain
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.
Delete
Duplication with 2.3
Rewrite to make it a This standard is based on the context of
Level 1 unit standard community organisations – best suited to Level 1.
Make available
use
outside
schools only
Keep
Delete
Delete
Make available
use
outside
schools only
Keep
Make available
use
outside
schools only
for Duplication with 3.1
of
Assesses partnership accounting which is no
longer covered in the achievement standards. May
need minimal alterations to update the standard.
Duplication with 3.1 and 3.2
Duplication with 3.1 and 3.3
for Duplication with 3.4
of
Element 1 is outside the scope of the Accounting
curriculum
This Unit Standard will need to be rewritten and will
be based on the current 90502 standard
for Duplication with 3.5
of
NZCETA Accounting Alignment – Overview Matrix Consultation
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)
NZCETA Accounting Alignment – Overview Matrix Consultation