And while 17 per cent fewer parents knew of the "watershed" time than in 2001, 10 per cent more children knew of the time now than seven years ago.
Under broadcasting codes, television channels do not show adult-oriented material until after 8.30pm.
The research shows many children are still watching after that time - nearly half of children say they watched television after 8.30pm on a Friday or Saturday.
That means they are watching horror films, and shows with sexual content and violence, such as
Desperate Housewives
and
Crime Scene Investigation.
BSA chief executive Dominic Sheehan said the drop in awareness came as a surprise.
"We didn't realise it had fallen by this much," he said.
"Parents need to be aware that if they want to protect their children from challenging content, they need to control what the child is watching from that time on."
The BSA asked 600 children between the ages of 6 and 13 and their primary caregivers about the children's use of media.
The study found there had been an explosion of media devices in homes since 2001. But television was still the most-used - 99 per cent of children said they watched TV.
More than a quarter had a television set in their bedroom, up 9 per cent from 2001.
Broadcasting Minister Trevor Mallard said the findings underlined the need for parents to be aware of what their children were seeing.
Parents listed violence, bad language, sexual content and nudity as things they did not think their children should see on television.
Two thirds of parents restricted the hours and time of day their children could watch TV, and many supervised children's TV watching or restricted viewing according to content.
Media researchers spoken to by the
Herald
said the fact children were watching after 8.30pm was not a reason to panic.
Waikato University associate professor of screen and media studies Geoff Lealand said the BSA findings backed up previous research, which showed many children would turn off or switch away from content if they came across something they thought was unsuitable.
Auckland University senior media studies lecturer Luke Goode said a much bigger concern than exposure to adult content was the effect of late night TV on a child's health.
BSA chief Mr Sheehan said children were far from helpless when it came to using media.
"People often paint children as passive sponges who are unable to differentiate good content from bad. Children are actually very savvy."
But he had not ruled out bringing back the Goodnight Kiwi, whose bedtime preparations indicated the end of broadcast on Television New Zealand between 1981 and 1994, to remind children when it was time for bed.
Watch the Goodnight Kiwi below:
