In a rapidly changing Australian health care environment, providers of undergraduate nursing programs are continually upgrading their assessment methods to ensure that graduates are competent and safe to practice. Competence assessment is based on the existing Australian Nursing & Midwifery Council (ANMC) Competency Standards for Registered Nurses. It is acknowledged that there are issues surrounding the validity and reliability of current assessment methods, primarily due to organizational constraints both at the University and the service provider level. There are a number of highly reliable tools available that enable assessment of nursing students in the psychomotor domain. Assessment in other domains is less precise. This paper explores some of the issues relating to competence assessment processes in order to promote discussion and discourse between educators, facilities and policy makers. It is envisaged that increased debate will result in an enhanced level of academic and clinical preparation for the upcoming nursing workforce in this country.