Application
This unit requires the application of skills and knowledge required to develop and implement financial strategies. The unit encompasses reviewing data, determining options, implementing strategies and evaluating outcomes.
The unit has application to all sectors of the financial services industry.
This unit requires the application of skills and knowledge required to develop and implement financial strategies. The unit encompasses reviewing data, determining options, implementing strategies and evaluating outcomes.
The unit has application to all sectors of the financial services industry.
Prerequisites
Not applicable.
Elements and Performance Criteria
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 Skills
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 Required
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. |
Range Statement
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 |
Datamay 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 proceduresmay 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 |
Sectors
Not applicable.
Employability Skills
The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary for the qualification in which this unit of competency is packaged, will assist in identifying employability skills requirements.
The required outcomes described in this unit of competency contain applicable facets of employability skills. The Employability Skills Summary for the qualification in which this unit of competency is packaged, will assist in identifying employability skills requirements.
Licensing Information
Not applicable.