Higher National Unit Specification: Statement of Standards
Higher National Unit specification: statement of standards
Unit title: Business Accounting F84M 34 (extract)
This is an extract from the Unit Specification of the Business Accounting Unit and you will use this to identify the requirements that the student scripts must meet when making an assessment judgement.
On the reverse you will find marking guidelines to enable you to make a judgement.
Outcome 3
Identify the users of financial information and the purposes for which they require the information
Knowledge and/or Skills
• Users of financial information
• Purposes of financial information
• Sources of financial information
Evidence Requirements
Candidates will need to provide evidence to demonstrate their Knowledge and/or Skills by showing that they can:
• identify four relevant users of financial information from: present shareholders, potential shareholders, short-term creditors, long-term creditors, authorities, competitors, employees, analysts, and management
• describe the purpose for which each user requires this information
• identify the source of relevant information for each user
The evidence should be generated under open book supervised conditions.
Candidates must identify four relevant users of financial information, relevant to the given case study/scenario, and correctly identify the source of the information. They should clearly describe the purpose for which each user requires the information.
Where this Outcome is assessed independently from Outcomes 4 and 5, a different case study/scenario must be used.
Assessment Guidelines
Assessment of this Outcome may be combined with Outcomes 4 and 5, details of which are given under Outcome 5.
Where this Outcome is assessed independently from Outcomes 3 and 5, a different case study/scenario must be used.
Making an assessment decision
All users will review the published accounts as a whole to get an overall feeling for the company’s position and performance. The table below gives the more specific requirements for each of the user groups.
User / Purpose / SourceExisting Shareholders / Assess performance of the board. Increase or decrease investment / Income Statement — profit and dividend figures. Directors report — future plans
Potential Shareholders / Income/growth potential from investment. Assess the risk attached to investment / Profit and Loss — profits retained/distributed. Balance Sheet — capital structure
Short term creditors/trade payabes / Should we supply the company with goods on credit? Will debts be paid in a timely manner? / Statement of Financial Position — net current asset figures. How quickly are debts paid? Statement of Cash Flows — major inflows/outflows of cash
Long term creditors / Should we lend money to the organisation? Can interest payments be met? Will the amount be repaid when due? / Income statement — interest cover. Statement of financial position — existing level of debt. Cash Flow statement — major inflows/outflows of cash
Government Agencies / Has the organisation any plans which will affect the area? How much tax should the company be paying? Should the government allow grants under special schemes to the company? / Income statement — profit/tax figures. Directors report — future plans, employment details
Competitors / Has the company increased its profitability and market share? Has it any plans which may conflict with ours? / Income statement — turnover/revenue and expenses pattern. Directors report — future plans
Employees / How much of a pay rise can we push for? Is our future secure? / Income Statement — profit figures. Statement of financial position — net current assets. Statement of Cash Flow — major inflows/outflows of cash
Analysts / Assessment of the company with a view to recommending investment or disinvestment etc / All published information
Management / Assessment of performance and assistance in planning and control function / All information — in segmented form including budget figures