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In Australia there is no centrally administered nationwide assessment system for students who complete their final year (Year 12) of high school. Each state and territory uses its own Year 12 assessment system. Apart from Queensland and the Australian Capital Territory, all states and territories use externally set competitive examinations. The Queensland and Australian Capital Territory systems focus on continuous assessment that commences when students begin Year 11. Hence, policymakers at the state, territory and federal levels in Australia are debating over which of the Year 12 systems is superior, that is, an externally set competitive examination or a school/college-based continuous assessment system? If one of the assessment systems is superior to the other, then it is expected that the superiority should be reflected by the students' subsequent academic performances at their tertiary-level studies. In this article we specifically addressed this issue and compared the academic performances of these two groups of students at an Australian university in their first year of a business degree. We found no difference in their academic performances in the subjects studied. The empirical evidence provided in the article does not, therefore, support the claim that one system is superior to the other. Essentially, both systems have their inherent merits and demerits. The merits of one system are offset by the merits of the other system and vice versa.