List the assessment methods to be used and the context and resources required for assessment. Copy and paste the relevant sections from the evidence guide below and then re-write these in plain English.
ELEMENT | PERFORMANCE CRITERIA |
Elements describe the essential outcomes. | Performance criteria describe the performance needed to demonstrate achievement of the element. |
1. Assess financial risk exposure | 1.1 Identify and measure magnitude and volatility of organisational risks to determine extent of risk exposure and implications for financial strategies 1.2 Identify key factors supporting or driving risk exposure and establish timeframes to monitor and improve performance 1.3 Compare short-term and long-term financial outcomes and projections with actual cash flows using standard financial analysis techniques to determine effects on liquidity and budget adjustments |
2. Develop risk management processes | 2.1 Ensure risk management options include assessments of alternatives, criteria for success and estimates of long-term and short-term effects 2.2 Identify and evaluate key ethical, legislative and organisational considerations for risk management options 2.3 Develop strategies using standard financial analysis techniques to identify financial flows, trends in returns and adjustments in asset values 2.4 Establish financial recording systems to monitor and evaluate changes in market conditions and business needs using range of data sources 2.5 Develop risk management strategies that optimise mix of asset structures and liabilities in operations and ensure flexibility to meet changing environments |
3. Analyse financial histories | 3.1 Evaluate financial performance using trends and patterns that identify magnitude and volatility of financial exposures 3.2 Compare long-term and short-term financial outcomes with forecast outcomes to assess variances and parameters in performance and reliability of financial advice 3.3 Identify and analyse incidents and factors increasing or diminishing financial performance using standard financial analysis techniques |
4. Establish processes to minimise risks | 4.1 Develop and review recording systems to monitor financial outcomes and to guide and document decision making 4.2 Maintain and establish inventories to ensure up-to-date records on value of assets and liabilities 4.3 Assess contribution of organisational attitudes to risk taking and incorporate in risk analysis process 4.4 Develop, review and communicate parameters for variances in financial outcomes to support financial decision making |
Evidence of the ability to:
apply standard financial analysis techniques and knowledge of an organisation’s attitude to risk to identify and assess financial risk
develop risk management processes that comply with relevant ethical, legislative and organisational requirements
establish processes to minimise risks based on analysis of financial histories.
Note: If a specific volume or frequency is not stated, then evidence must be provided at least once.
To complete the unit requirements safely and effectively, the individual must:
identify and discuss the key ethical considerations for compliance
explain the key features of financial legislation relevant to financial risk and compliance
compare and contrast methods of storing, recording and updating financial information and data
explain the key principles of:
internal control, including statutory reporting
risk management and budgetary control
explain organisational structures and lines of management authority.
Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the accounting field of work and include access to:
common office equipment, technology, software and consumables
an integrated financial software system and data.
Assessors must satisfy NVR/AQTF assessor requirements.