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Evidence Guide: FNSACCT609B - Evaluate financial risk

Student: __________________________________________________

Signature: _________________________________________________

Tips for gathering evidence to demonstrate your skills

The important thing to remember when gathering evidence is that the more evidence the better - that is, the more evidence you gather to demonstrate your skills, the more confident an assessor can be that you have learned the skills not just at one point in time, but are continuing to apply and develop those skills (as opposed to just learning for the test!). Furthermore, one piece of evidence that you collect will not usualy demonstrate all the required criteria for a unit of competency, whereas multiple overlapping pieces of evidence will usually do the trick!

From the Wiki University

 

FNSACCT609B - Evaluate financial risk

What evidence can you provide to prove your understanding of each of the following citeria?

Assess financial risk exposure

  1. Magnitude and volatility of risks are measured to determine the extent of risk exposure and the implications for financial strategies
  2. Key factors supporting or driving risk exposure are identified and timeframes established to monitor and improve performance
  3. Short and long term financial outcomes and projections are compared with actual cash flows using standard financial analysis techniques to determine effects on liquidity and budget adjustments
Magnitude and volatility of risks are measured to determine the extent of risk exposure and the implications for financial strategies

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Key factors supporting or driving risk exposure are identified and timeframes established to monitor and improve performance

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Short and long term financial outcomes and projections are compared with actual cash flows using standard financial analysis techniques to determine effects on liquidity and budget adjustments

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Develop risk management processes

  1. Risk management options include assessments of alternatives, criteria for success, and estimates of long and short term effects
  2. Strategies are developed using standard financial analysis techniques to identify financial flows, trends in returns and adjustments in asset values
  3. Financial recording systems are established to monitor and evaluate changes in market conditions and business needs using a range of data sources
  4. Risk management strategy optimises the mix of asset structures and liabilities in operations and ensures flexibility to meet changing environments
Risk management options include assessments of alternatives, criteria for success, and estimates of long and short term effects

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Strategies are developed using standard financial analysis techniques to identify financial flows, trends in returns and adjustments in asset values

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Financial recording systems are established to monitor and evaluate changes in market conditions and business needs using a range of data sources

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Risk management strategy optimises the mix of asset structures and liabilities in operations and ensures flexibility to meet changing environments

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Analyse financial histories

  1. Financial performance is evaluated using trends and patterns that identify the magnitude and volatility of financial exposures
  2. Long and short term financial outcomes are compared with forecasted outcomes to assess variances and parameters in performance and the reliability of financial advice
  3. Incidents and factors increasing or diminishing financial performance are identified and analysed using standard financial analysis techniques
Financial performance is evaluated using trends and patterns that identify the magnitude and volatility of financial exposures

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Long and short term financial outcomes are compared with forecasted outcomes to assess variances and parameters in performance and the reliability of financial advice

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Incidents and factors increasing or diminishing financial performance are identified and analysed using standard financial analysis techniques

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Establish processes to minimise risks

  1. Recording systems to monitor financial outcomes are developed and reviewed to guide and document decision making
  2. Inventories are maintained and established to ensure up-to-date records on the value of assets and liabilities
  3. The contribution of organisational attitudes to risk taking is assessed and incorporated in risk analysis process
  4. Parameters for variances in financial outcomes are developed, reviewed and communicated to support financial decision making
Recording systems to monitor financial outcomes are developed and reviewed to guide and document decision making

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Inventories are maintained and established to ensure up-to-date records on the value of assets and liabilities

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

The contribution of organisational attitudes to risk taking is assessed and incorporated in risk analysis process

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Parameters for variances in financial outcomes are developed, reviewed and communicated to support financial decision making

Completed
Date:

Teacher:		 Evidence:

 

 

 

 

 

 

 

Assessed

Teacher: ___________________________________ Date: _________

Signature: ________________________________________________

Comments:

 

 

 

 

 

 

 

 

Instructions to Assessors

Evidence Guide

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 financial analysis techniques

knowledge of organisation's attitude to risk

ability to identify financial risk

ability to develop risk management processes

ability to analyse financial histories

ability to establish processes to minimise risks

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.

Required Skills and Knowledge

REQUIRED KNOWLEDGE&SKILLS

Knowledge requirements include:

principles of risk management and budgetary control

methods of storing, recording and updating financial information

principles of internal control (including statutory reporting)

financial legislation (eg taxable transactions, reporting requirements)

ethical considerations for compliance

understanding of organisational structures and lines of management authority

Skills requirements include:

recording, gathering and consolidating financial information

researching and identifying applicable accounting standards and decisions

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

report writing and preparation

numeracy skills for calculation of data

use computers, organisational accounting software systems, spreadsheet software programs and telecommunication devices to achieve workplace outcomes

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.

Risk exposure may include:

credit risks

interest rate risks

contractual risks

currency risks

environmental and operational risk

Factors supporting or driving risk may include:

organisational program costs

employment costs

lending and repayment criteria

payment and billing schedules

lending and borrowing environments

Standard financial analysis techniques may include:

capital budgeting

cost-benefit analysis

'what if' analysis

time series

bivariate and multivariate analyses

Risk management options may include:

quantification of risks

periodic reporting

decision making authorities

policy statements

forecasting

comparative analysis

Financial recording systems may include:

accrual accounting reporting

transaction recording

operating procedures and manuals

comparative costings

budget reviews

organisational communication processes

Data sources 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

Asset structures and liabilities may include:

property investments

shares, bonds, securities

loans, leases, debts

plant and equipment

personnel

cash accounts

Variances and parameters may include:

budget expenditures

profits and losses

rate of investment returns

unit costs

Inventories may include:

assets and liabilities

repayment and payment schedules

compliance and completion timetables

cost structures

returns and performance over time

Organisational attitudes may include:

risk aversion

risk taking

risk minimisation

proportional risk management