Understanding accounting

In the focus area of understanding accounting, students explore the role of accounting in business contexts. They develop the foundational understandings of accounting, including the underpinning concepts and conventions, and explore how these concepts and conventions impact accounting activities. Students develop an understanding of the existence and influence of regulatory frameworks on accounting practice. Students develop an awareness of how local and global perspectives influence accounting activities.

Financial literacy

Students develop an understanding of the difference in ownership structures for a range of entities. They distinguish between the accounting entity and the legal entity.

Students understand, apply, and explain the accounting process, the accounting equation, and the duality concept. They understand and explore the various elements of accounting reports. They understand and apply the faithful representation, relevance, consistency, and materiality of that information.

Students understand and apply the terminology and features of a range of reports used by different entities to communicate accounting information. They explore:

• the links between reports
• the impact of the accounting period on the preparation of final reports
• how financial transactions impact on the accounting information within reports
• the influence of regulatory frameworks on accounting practice.

Stakeholder information and decision-making

Students develop an understanding of the different internal and external users of accounting information.

Students explore the reporting needs of a range of stakeholders. When preparing reports, students take into consideration the accounting information requirements and ethical implications for decision-making by stakeholders.

Students develop their understanding that the role of accounting is to enable accountability, control, and effective decision-making.

Innovation

Students develop an understanding of the changing forms of accounting information, such as, but not limited to:

• written records
• computer-based records
• cloud-based accounting systems
• point-of-sale systems
• online banking and smartphone applications.

Students explore contemporary methods of communicating accounting information to meet specific needs of stakeholders.