Abstract: Critical Comparative Nursing Assessment (CCNA) is a theory about how the competence of completing Bachelor of Nursing students in New Zealand is determined. Semi-structured, audio-taped interviews and field notes were used to collect data from twenty-seven nurses with experience in undertaking competency assessment. A Glaserian grounded theory approach was used to guide the data collection and analysis. This utilised the processes of constant comparative analysis, theoretical sampling and saturation to generate a middle range substantive grounded theory. This is presented as a model consisting of four emergent categories that explain how nurses formulate professional judgements about competence. These are a) gathering, which describes the processes used to collect evidence of practice to inform decisions; b) weighing up, which explains how evidence is analysed using the processes of benchmarking and comparative analysis; c) judging brings into focus the tensions inherent in making professional judgements about competence and how nurses formulated these, and d) moderating, which describes the processes nurses use to validate decisions and ensure that professional responsibilities and public safety are upheld. The basic social psychological process of comparing integrates these categories to explain how nurses resolve the tensions associated with making decisions about competence. This research presents a new way of viewing and understanding how nurses assess competence. It identifies where the challengers and tensions related to the assessment of competence lie and suggests strategies that if implemented, the author suggests could further enhance the validity and reliability of assessment outcomes.