IAB LEVEL 3 DIPLOMA IN FINANCIAL ADMINISTRATION
(Qualification Accreditation Number 500/4683/4 – accreditation end date 31/12 2010)
No Section Pages
1 Introduction 2
2 Aims 2
3 Target Group 3
4 Statement of Level 3
5 Entry Requirements 4
6 Progression 4
7 The Structure of the Qualification 4
8 Assessment and Grading 5
9 Certification 6
10 NVQ in Accounting Level 3 Sign-posting 6 11 Signposting to National Occupational Standards in Business Enterprise 6
12 Key Skills Links 6
13 Spiritual, Moral, Ethical, Social and Cultural Values 6 14 Health and Safety Issues, Environmental Issues and 7
15 Reasonable adjustments for candidates with particular requirements 7
16 Enquiries and Appeals 7
17 Unit Assessment 7
18 Unit Specifications 7
IAB (International Association of Book-keepers) Burford House
44 London Road
Kent TN13 1AS
Telephone: 01732 458080
thIAB LEVEL 3 Diploma in Financial Administration Qualification Specification v2 26 June 2008 1
The overall aim of this qualification is to accredit candidates’ knowledge and understanding of the fundamental principles concerned in a wide range of skills required in the preparation of documentation and reports relating to the area of financial administration, and/or overseeing the process of financial administration within the business structure. This over-arching qualification contains two mandatory units and two optional units (from the four optional units given). The mandatory units are those of the Level 3 Diploma in Accounting and Advanced Book-keeping, and the Level 3 Diploma in Computerised Accounting as follows:
Unit 1 Record Adjustments and Prepare Financial Statements
Unit 2 Accounting and Advanced Book-keeping using Accounting Software
These units aim to accredited skills in relation to the preparation of complex Financial Statements in both a manual and computerised environment, following the calculation of the necessary accounting adjustments. Within the qualification, candidates have the opportunity to gain knowledge of the processes necessary to prepare a Fixed Asset Register and complete the necessary calculations associated with Fixed Assets. Candidates will also be able to develop the skills necessary to prepare for the correction of errors using a Suspense Account, and calculations relating to Stock, prepayments, accruals and bad debts. Finally the candidate will be able to prepare financial statements for a variety of business organisations, including a sole trader and a partnership. These units also require candidates to understand the use of the Journal and the preparation of the Trading Account, Profit and Loss Account and Balance Sheet, which form the Financial Statements. Various scenarios are covered including the preparation of financial statements for non profit making organisations and from a set of incomplete records. Accuracy, integrity and security of data should always be uppermost in the candidates mind. All aspects of this qualification will be examined using both manual accounting skills and those related to using commercially available accounting software.
The two option units can come from the IAB Level 3 Diplomas in Business Law, Computerised Payroll, Payroll and Cost and Management Accounting and are as follows:
Unit 3 The Application of Business Law in Small Businesses
Unit 4 Computerised Payroll administration
Unit 5 Managing Payroll Administration
Unit 6 Cost and Management Accounting Methods and Analysis
By completing two of these further Units of study the candidate will demonstrate a wider knowledge of financial administration and the relevant skills at Level 3.
To be awarded the qualification, candidates are required to successfully demonstrate their competence by means of five external examinations. It will also provide progression to the NVQs in Accounting at Levels 3 and 4, and also NVQ’s in Payroll at Level 3 if the Payroll units are chosen.
Candidates may use this qualification as the basis of further study of manual and computerised systems at Level 4 of the National Occupational Standards, and use it as underpinning knowledge for the study of the IAB Level 4 Diploma in Accounting to International Accounting Standards.
In summary, the qualification aims to enable candidates to:
1 Assess their competence and understanding in carrying out a range of day-to-day
accounting and advanced book-keeping routines and activities using both manual and
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computerised book-keeping systems. The activities will include routine book-keeping and
accounting tasks, including the production of complex financial statements for a Sole
Trader or Partnership from both complete and incomplete records.
2 Assess a wider range of financial skills and knowledge by the study of financially related
subjects such as payroll or cost and management accounting. Candidates may also opt to
study a unit relating to Business Law which will give an underpinning knowledge of laws
relating to the preparation of financial statements and financial operations within the
3 Assess their understanding of the importance of maintaining accuracy, security and
integrity in performing any book-keeping or other financially related tasks using both
manual and computerised accounting and payroll systems.
4 Upon completion, progress in their learning to further develop their knowledge,
understanding and skills by further studies of accounting routines and procedures at this
Level (Level 3) and Level 4 of the National Occupational Standards.
3 TARGET GROUP
This IAB qualification is specifically designed to appeal to those who are aspiring to become, or who are already, professional book-keepers or financial administrators. By completing this full qualification candidates will have gained a wide range of skills necessary to work as Financial Administrators within a small to medium sized business structure.
This Level 3 qualification is primarily designed for the following candidates: 1 Those who already have some book-keeping experience and who wish to acquire further
skills and knowledge required of Book-keepers, Payroll and Accounting Administrators. 2 Those candidates who already hold the IAB Level 1 and Level 2 Certificates in Book-
keeping, the IAB Level 2 Certificate in Computerised Book-keeping, IAB Level 2 Certificates
in Payroll, IAB Level 2 Certificate in Computerised Payroll.
3 Those who are already employed in Book-keeping or allied roles and who wish to enhance
there firm foundation and the knowledge and skills to perform some advanced routine and
non-routine tasks in book-keeping and accounting plus other financially related routines,
both in a manual and computerised environment.
4 Those preparing for or undertaking an NVQ in Accounting at Level 3 and NVQ in Payroll at
Level 3 who wish to underpin this with a thorough grounding in the fundamental technical
knowledge, understanding and skills associated with producing and processing financial
statements and processing of payroll at that level.
5 Those who may wish to continue to a higher level of study in Accounting, Payroll, Cost and
Management Accounting and Business Law plus other related subjects and qualifications.
4 STATEMENT OF LEVEL
This qualification has been designed to assess the knowledge and skills of manual and computerised book-keeping and accounting at Level 3 of the National Qualifications Framework with some Learning Outcomes being at Level 2 and Level 4. If the Payroll options are taken then the knowledge and skills of manual and computerised payroll at Level 3 of the National Qualifications Framework are also covered.
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5 ENTRY REQUIREMENTS
It is recommended that before commencing a course leading to the IAB Level 3 Diploma in Financial Administration the prospective candidate has already achieved the IAB Level 2 Certificate in Book-keeping and the IAB Level 2 Certificate in Computerised Book-keeping. If the Payroll options are taken then the candidate should have already achieved the IAB Level 2 Certificate in Payroll and/or the IAB Level 2 Certificate in Computerised Payroll. Alternatively, they should have comparable prior knowledge and skills acquired through paid or voluntary work experience.
The candidate does not need to provide evidence of a qualification at Level 2 to the IAB to enable entry for the examination but the Centre/tutor will be required to confirm, through signature on the examination entry form, that they consider that the candidate has either an IAB Level 2 Certificate in the relevant skills they are wishing to be examined in, or a qualification recognised as equivalent by the IAB or acquired the relevant prior knowledge and skills necessary.
Candidates who are studying independently (ie not undertaking a course of study through an IAB
accredited centre either by attendance or distance learning), will be required to confirm by their own signature on the examination entry form that either they have the necessary underpinning knowledge and skills necessary.
As the examinations test the application of knowledge, understanding and skills and not simply the recall of facts and figures, candidates will be expected to demonstrate an understanding of the subject area and to apply this knowledge in the various examinations.
Information regarding equivalent qualifications can be found via the IAB web-site (www.iab.org.uk) or by contacting the IAB directly.
The qualification has been designed to provide the essential knowledge, understanding and skills required to complement and enable candidates to progress to other related qualifications at Level 3 and Level 4 of the National Qualifications Framework.
The qualification will provide a basis for progression to the study of the IAB Level 4 Diploma in Accounting to International Standards. It will also provide some coverage of Units 4, 6 and 15 of the National Occupational Standards which gives additional coverage of NVQ in Accounting at Levels 2, 3 and 4. If the Payroll Units are chosen then there is additional coverage of the NVQ in Payroll at Levels 2 and 3.
It will also provide progression to A/AS levels in Accounting and Business Law and related units in the Advanced Vocational Certificate of Education (AVCE) qualifications.
7 THE STRUCTURE OF THE QUALIFICATION
The Level 3 qualification consists of 4 units examined by means of 5 examinations ranging between 2 and 3 hours each. It contains manual and computerised aspects and comprises twenty one (21) mandatory Learning Outcomes with associated Assessment Criteria. It also contains a
minimum of 12 (maximum of 19) further Learning Outcomes with associated Assessment Criteria. It should be noted that the qualification contains work in both a manual and computerised environment.
Teachers/trainers may find it necessary to address the individual Units and therefore the Learning Outcomes in a different order initially to those shown in the Unit Specifications. Teachers and trainers should ensure that learning programmes are designed to meet the needs of individual
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candidates. They should also ensure that learning programmes take account of the need for candidates’ to continue to be fully competent in the knowledge and skills gained during this initial
study of manual book-keeping.
It is considered that the full qualification has an estimate of between 255 and 270 GLH covering both the mandatory and optional Units, or 510 to 540 hours of Notional Learning Time (NLT). It is ‘notional’ because the actual GLH, or NLT, of course must take into account the specific needs of the individual candidates for the full qualification. For example, candidates who are relatively new to working with some areas of the syllabus may need significantly more GLH/NLT as opposed to those with substantial experience who may need less. Teachers/trainers should use their professional judgement in assessing the needs of candidates and deciding the GLH/NLT to be provided.
8 ASSESSMENT AND GRADING
All Learning Outcomes will be assessed through five, externally set and marked, two – three hour
examinations each consisting of a series of either hand-written questions or computerised tasks. The examinations will build on the candidates’ book-keeping and accounting knowledge within the
mandatory units and payroll and/or management and business law within the optional units, and will assess the candidate’s ability in relation to the Learning Outcomes. Candidates will be required to carry out the tasks accurately and in keeping with current accounting concepts and practice. Faults will be incurred where candidates make errors in numeracy, spelling or failing to follow required procedures.
In order to achieve a Pass, candidates will be required to complete the assessment tasks without exceeding the permitted error tolerance. Candidates will be required to pass all examinations before successfully completing the qualification.
To achieve the qualification, candidates must obtain at least 55% in the Level 3 Diploma in Accounting and Advanced Book-keeping (Record Adjustments and Prepare Financial Statements), the Diploma in Business Law (The Application of Business Law in Small Businesses) and Diploma in Cost and Management Accounting (Cost and Management Accounting Methods and Analysis) as follows:
PASS AND FAIL MARKS/PERCENTAGES – Pass Mark of 55%
A* DISTINCTION WITH COMMENDATION 95% and above
A DISTINCTION 85 – 94.99%
B CREDIT 70 – 84.99%
C PASS 55 – 69.99%
M MARGINAL FAIL 50 – 54.99%
F FAIL Below 50%
The pass rate for the Diploma in Payroll (Managing Payroll Administration), the Diploma in Computerised Payroll (Computerised Payroll administration) and the Diploma in Computerised Accounting (Accounting and advanced Book-keeping using Accounting Software) is 65%. Such candidates are categorised into four grades as follows:
PASS AND FAIL MARKS/PERCENTAGES – Pass Mark of 65%
A* DISTINCTION WITH COMMENDATION 95% and above
A DISTINCTION 85 – 94.99%
B CREDIT 75 – 84.99%
C PASS 65 – 74.99%
M MARGINAL FAIL 60 – 44.99%
F FAIL Below 60%
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Candidates may sit the Examinations on either the specific dates set and published by the IAB or on dates set by Centres on an ‘On-demand’ basis. Centres are advised to consult the IAB Centre Handbook on the IAB website (www.iab.org.uk) or contact the IAB for details of how to arrange
an 'On-demand' examination. All necessary security of candidate data and information will be undertaken by the IAB.
All candidates who achieve a Pass grade will receive a formal Results Letter for each Unit undertaken and on successful completion of all examinations the candidate may apply for the IAB Level 3 Diploma in Financial Administration.
10 NVQ IN ACCOUNTING LEVELS 3 AND 4 SIGN-POSTING
A sign-posting map is provided within the specification for each individual qualification, demonstrating the links between the individual qualifications and the knowledge and understanding requirements of the NVQ in Accounting at Levels 3 and 4.
11 SIGNPOSTING TO NATIONAL OCCUPATIONAL STANDARDS IN
A sign-posting map is provided within the specification for the Level 3 Diploma in Business Law and the knowledge and understanding requirements of the NVQ in Business Enterprise.
12 KEY SKILLS LINKS
During their study towards the qualification, candidates may have opportunities to develop the knowledge and skills necessary to produce some of the evidence required for the Level 3 for the following Key Skills:
Working with Others
Application of Number
Information Communication Technology
Improving Own Learning and Performance
Mapping against Key Skills can be found within the Qualification Specifications for each individual qualification within this overarching qualification.
13 SPIRITUAL, MORAL, ETHICAL, SOCIAL AND CULTURAL VALUES
Tutors preparing candidates would have opportunities to introduce relevant ethical, social and moral values throughout a course leading to this qualification. Of specific relevance would be matters of honesty and integrity, probity and confidentiality of information. In addition, the IAB Framework for Regulation and Code of Best Practice also underpin all Learning Outcomes of the qualification.
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14 HEALTH AND SAFETY ISSUES, ENVIRONMENTAL ISSUES AND EUROPEAN
There is basic coverage of Health and Safety issues relating to the office working environment within the computerised units of this qualification.
Health and Safety and European Developments will be covered throughout the Unit relating to Business Law. Specifically, these issues are covered in the Learning Outcomes in the areas of Negligence, Employment Law and the English Legal System.
Health and Safety: Employer and employee relationships often focus on issues of health and
safety and the need to ensure the well-being of all concerned. Consequently, health and
safety issues are addressed throughout this unit.
: Since the UK joined the European Union, European Law has become an European developments
important source of law affecting important areas such as consumer protection, health and
safety, human rights and business activities. Consequently, the impact of European
developments on UK laws is considered throughout this unit.
15 REASONABLE ADJUSTMENTS FOR CANDIDATES WITH PARTICULAR
The IAB and IAB Accredited Centres are required to ensure that candidates with particular assessment needs are not disadvantaged and that appropriate arrangements are made to meet their assessment needs. The procedure to make an application for arrangements to meet a candidate’s specific needs is detailed in the IAB Centre Handbook.
16 ENQUIRIES AND APPEALS
The IAB and IAB Accredited Centres are required to process all enquiries and appeals in accordance with the IAB established procedures.
17 UNIT ASSESSMENT
Candidates may sit the Examination of this Unit on either the specific dates set and published by the IAB or on dates set by Centres on an ‘On-demand’ basis. Centres are advised to consult the
IAB Centre Handbook on the IAB website (www.iab.org.uk) or contact the IAB for details of how to
arrange an 'On-demand' examination. All necessary security of data and information will be undertaken.
18 UNIT SPECIFICATIONS
For Unit Specifications see pages 8 – 30 of this document.
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Unit 1: Record Adjustments and Prepare Financial Statements (Mandatory) - Unit accreditation number F/501/2572
GLH: 90 hours ASSESSMENT TIME: 2 x 2 hours
Aim Upon the completion of study for this qualification, it is intended that the candidate will be able to:
; Use a Suspense Account and eliminate book-keeping errors
; Understand the form and function of the Trading Account, Profit and Loss Account and Balance
; Understand and apply accounting concepts and accounting policies
; Categorise items of income and expenditure
; Maintain records and make accounting adjustments relating to stock
; Maintain records and make accounting adjustments for prepayments and accruals
; Maintain records and account for the depreciation and disposal of tangible fixed assets
; Maintain records and account for bad and doubtful debts
; Prepare financial statements for a sole trader
; Prepare and extended Trial Balance for a sole trader
; Prepare financial statements for a sole trader from incomplete records
; Prepare financial statements for a ‘Not for Profit’ organisation
; Maintain records and prepare financial statements for a partnership
; Account for changes in the composition of a partnership
Prior Knowledge and Skills Requirements
Before starting a course of study or training leading to the assessment for this unit, it is assumed and is
advisable that the candidate has already acquired the knowledge and skills as specified in the IAB Level 2
Certificate in Book-keeping or any other compatible qualification. Learning Outcome Assessment Criteria
1 Use a suspense account and Understand the purpose of a Suspense Account and how it is used as
eliminate book-keeping errors a holding account or as a temporary measure to correct an imbalance
within a double entry book-keeping system.
Be able to:
; Prepare a Trial Balance from a list of balances entering any
imbalance as a Suspense Account balance
; Post a balance introduced to ‘correct’ an imbalance in the
books to a Suspense Account.
; Prepare the Journal entries necessary to correct book-keeping
; Eliminate a Suspense Account balance following the correction of
2 Understand the form and Understand the form and function of the Trading Account, Profit and
function of the Trading Loss Account and the Balance Sheet
Account, Profit and Loss
Account and Balance Sheet Be able to:
; Recognise the Trading Account as being an account used to
calculate the Gross Profit of a trading organisation.
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Learning Outcomes Assessment Criteria
2 Understand the form and ; Recognise the Profit and Loss Account as being an account used to
function of the Trading calculate the Net Profit of a trading organisation or service provider.
Account, Profit and Loss
Account and Balance Sheet ; Recognise the Balance Sheet as being a statement of the assets,
(continued) capital and liabilities of a business entity.
3 Understand and apply the Understand the need for a business entity to adopt and apply
accounting concepts and appropriate accounting policies
Be able to:
; Explain the meaning of the term ‘true and fair’ in the context of
preparing financial statements.
Understand how accounting concepts have been developed as a set of
rules and guidelines.
Be able to:
; Recognise and apply the accounting concepts that form the bedrock
of accounting policies.
; Going Concern
; Accruals (Matching)
; Recognise and apply the accounting concepts regarded as being
desirable in formulating accounting policies.
; Recognise and apply other accounting concepts:
4 Categorise items of income Understand the terms ‘Capital Income’, ‘Revenue Income’, ‘Capital
and expenditure Expenditure’, ‘Revenue Expenditure’
Be able to define the terms ‘Capital Income, ‘Revenue Income’,
‘Capital Expenditure’, ‘Revenue Expenditure’
Understand the need to categorise items of income expenditure as the
basis of recording transactions and preparing financial statements.
Be able to:
; Identify items of capital and revenue income and expenditure
; Apply the concept of materiality in categorising capital expenditure
; Categorise items of income and expenditure for the purpose of
preparing financial statements
; Appreciate the effects of confusing capital and revenue expenditure
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Learning Outcomes Assessment Criteria
5 Maintain records and make Understand the need to maintain records and make adjustments to
accounting adjustments account for stock
relating to Stock.
Be able to:
; Apply the accruals (matching) concept and use a closing stock
valuation in the preparation of financial statements
; Apply the prudence concept and value stock at the lower of cost or
net realisable value
; Prepare the Journal entry to account for closing stock
; Amend a stock valuation given practical problems commonly
associated with stock valuation
6 Maintain Records and Make Understand the principle of accounting for prepayments and accruals,
Accounting Adjustments for maintain relevant records and make prepayment and accruals
Prepayments and Accruals adjustments
Be able to:
; Explain the relevance of the accruals (matching) concept in the
context of adjustments for prepayments and accruals
; Calculate prepayment and accruals adjustments
; Prepare the Journal entries to account for prepayment and accruals
; Record prepayment and accruals adjustments in the relevant
income or expense account in the ledger
; Maintain dedicated Prepayment and Accruals Accounts in the ledger
; Prepare the Journal entry to transfer items of income earned and
expense incurred in an accounting period to the Profit and Loss
; Record income earned and expenses incurred on the Profit and Loss
; Record prepayments and accruals on the Balance Sheet
; Prepare the Journal entries to reverse Prepayment and Accruals
Account balances following the preparation of year end financial
statements and post the reversed balances to appropriate income
and expense accounts in the ledger
7 Maintain Records and Account Understand the principle of depreciating tangible fixed assets, maintain
for the Depreciation and appropriate records and account for the depreciation and disposal of
Disposal of Tangible Fixed fixed assets
Be able to:
; Explain the term ‘tangible fixed assets’ and give examples of fixed
assets falling within this category
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