Clarification details
Updated December 2017. This document has been updated to address issues that have arisen from moderation.
Clarifying ‘a contemporary accounting issue’
A contemporary accounting issue is one that:
- is new or topical and presents a challenge to the entity. While the entity may be a whanau or individual, topicality must go beyond a new experience or a concern shared by earlier generations. For example, the issue of how to finance tertiary study is a concern of many school leavers; it is not a new or current issue caused by an external source.
- requires the entity to make decisions about how to mitigate the issue
- has accounting relevance in that decisions made will impact on the finances of the entity.
A contemporary accounting issue for a college might be the need for more computers in response to NZQA’s digital assessment programme for external NCEA standards. This is topical as NZQA has announced that most external exams will be conducted online by 2020.
A contemporary issue for a bricks and mortar fashion store might be the increasing incidence of would-be customers viewing and trying on clothes prior to ordering the items from online stores (showrooming). If this is a trend that has not challenged the store in the past, it is a contemporary issue.
Clarifying ‘for decision-making’
The student is required to describe/explain/justify how the issue is relevant to the entity and the impact on decisions made, or about to be made, by the entity. Financial and non-financial impacts on decision making should be addressed.
In response to the digital assessment issue, the school might decide to purchase 100 new laptops. Alternatively, a BYOD policy might be introduced. The focus of the standard is not to weigh up the benefits and drawbacks of two options. Instead, the student is required to link the financial and non-financial decisions the school made back to the issue that drove the decisions.
The student must draw a conclusion for Achieved. A conclusion that explains/justifies the importance of the issue to the entity’s decision-making is required for Merit and Excellence respectively.