BSB61015 Advanced Diploma of Leadership and Management Assessment Resource – BSBFIM601 Manage finances | Page 1 of 55 V 3.1: May 2020, Approved: QAC, Next Review: December 2020 International College...

Running Head: Budget
Budget
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Contents
Part A    2
Question    2
Prepare budgets    5
Procedure    5
Part 1    5
Part B – Role-Play    9
Prompt questions    10
References    16
Part A
Question
Q1. Financial probity is the evidence of ethical behaviour in a process. Identify three principles and three examples of the requirements related to financial probity.
The main purpose of financial management is to make sure that there are sufficient funds to carry out activities and meet the needs of the organization's business goals. Accounting processing involves the reporting, recording, classification, analysis as well as interpretation of financial information, which is the result of financial transaction to meet information needs of external and internal users. Financial probity means, strict obedience to a code of ethics depend on complete honesty, particularly in monetary matters moreover beyond official needs.
Integrity: Professional accountants would be sincere and honest in all business relationships.
Objective: Professional accountants would not take conflict of interest, prejudice or undue influence of others over a professional or work judgment.
Confidentiality: Professional accountants must respect the privacy of information got through business relationships, provided that they have the right or professional legality or obligation to disclose any such information without proper as well as specific authority to third parties. do not offer.
Q2. Describe the principles of accounting and financial systems.
Consistency: The substantive principle guarantees completeness, as all major transactions must be described in the economic statements. Compliance refers to use of a company's accounting standards over a period of time. When accounting principles allow you to choose between different methods, the company must, over time, use the same accounting method or disclose changes in its method of accounting in the notes to the economic statements.
Accountability system: The reporting system applies to all persons engaged in business or professional activities from the date of establishment of the company. However, companies, trusts, associations and certain foundations are always responsible, regardless of whether they are doing business. Reporting means that the company's management is obliged to collect and store all written materials (such as receipts and letters) generated and described by the company's business activities, and on the basis of these company's accounts in a timely manner. and be drafted in accordance with the “Accounting Act”. Practices Good accounting practice to provide important material. The company's financial statements must be prepared on a timely basis. In addition to the Law on Accounting, other legal requirements (depending on the form of the company) apply to the preparation of financial statements.
Historical cost Principle: According to the principles of American universal accounting, the principle of historical value is the basic principle of accounting. According to the principle of historical value, even if the value of most assets increases significantly over time, most assets should be recorded in the balance sheet at their historical value.
Q3. Explain legislation and conventions relevant to financial management in an organisation, including:
a. Australian legislation and conventions
b. International legislation and conventions
c. State/territory legislation and conventions
Australian legislation and conventions: Australia has a state legal framework that provides a reasonable exchange between the organization and the buyer. Although the Australian government has enacted laws, state and territorial laws are still responsible for overseeing buyers ’insurance. Each country or region has a currency exchange point to guide you about your trading rights and obligations.
International legislation and conventions: International shows are arrangements or understandings between nations. Shows between two states are called two-sided arrangements; shows between few states (and more than two) are called plurilateral settlements; shows between an enormous number of states are called multilateral deals.
State/territory legislation and conventions: All Australian states and territories also have laws that make apartheid illegal. National and regional laws work with the laws of the Union to ensure the human rights of individuals residing in specific countries. In this respect, contrary to Union law, these laws do not cover the whole of Australia. However, they are limited to specific states or territories.
Q4. Outline the requirements of the Australian Tax Office (ATO), including:
a. Goods and services tax (GST)
b. Company tax
c. Pay as you go (PAYG) tax
Pay as you go (PAYG) tax: It is necessary to report the income and expenditure of goods and services tax, as well as the estimation of business and investment income, and report the income and qualified financial statements at end of the each fiscal year (D'Ascenzo, 2014). PAYG is an income tax system. Organizations can pay tax on their investment and business income in installments, hence that the organization can pay tax obligation in the process rather than being needed to pay taxes in one lump sum at end of the fiscal year.
The requirements of Australian Tax Office including
Goods and services tax (GST):
Goods and services tax (GST) a broad-based tax of 10% on most goods, services and other items sold or consumed in Australia. If you are a business, you use a BAS to:
· Pay and report GST your company has collected
· Maintain GST credits.
· A business is an official entity and its establishment and management costs are relatively high.
· The business has other reporting needs.
· The business is run by its mangers moreover own by its shareholder.
· As the business provides certain asset security, its managers might be responsible for its actions or, in a few cases, the business debts.
· The business is regulated by Investments Commission and Australian Securities.
· If you are no longer an employer, you should cancel your PAYG withholding tax registration.
· Before signing agreement as well as contract of work, you have to check whether employees or staff is allowed legally or officially to work in Australia.
· PAYG withholding tax is unique from payroll tax. Payroll tax is the state tax.
Company tax: Company tax is calculated based on its total sales minus the allowable deductions for various ordinary and essential business costs. The corporate tax rate is currently 30%. The corporate tax rate is reduced by 27.7%, which applies to companies that meet the basic tax rate entity conditions. The company must submit an annual company tax return, which should show: the company's income (Anatolievna, 2015).
Q5. What legislation applies to fraud and the misappropriation of funds?
The 2009 Criminal Procedure Code (Fraud, Identity, and Fraud Crimes) amended the Criminal Code to repeal some provisions relating to fraud, embezzlement, and forgery, and to replace these provisions with new rules on fraud and forgery. personality crimes. It started on February 22, 2010.
Q6. Explain the need for financial due diligence and outline what actions may be included in a financial due diligence review.
• Compliance with the due diligence obligation will help organizations prevent inappropriate financial behavior.
• Actions include a review of misappropriation of funds and/or differences.
Q7. Explain how you use P&L statements, cash flow and ageing summaries to manage issues that will affect the organisation’s ability to meet objectives.
By looking at outdated accounts receivable, managers can determine the amount of cash an organization can receive from consumers over a number of months. Profit or loss statement is a type of financial report that summarizes income, expenses as well as expenses for a particular period. Some people refer to an income statement as an income statement, an operating statement, a financial result or an income statement, an income statement or an expense statement.
Q8. Explain how forecast analyses and analyses related to budget preparation will enable you to contribute to financial bids and estimates.
Analysis of the organization’s financial statements through ratio analysis can help managers make recommendations to senior management based on the organizations past performance and current actual budget performance (Arnold, 2011).
Q9. What can the organisation do to maintain an audit trail to ensure accurate tracking and to identify discrepancies between agreed and actual allocations?
The organization should take a strong set of measure to make sure that financial information is properly processed, checked and authorized.
Q10. List considerations when reviewing existing software and its suitability for financial management.
• Does the system comply with ATO requirements also allow organizations to process and submit Taz payments electronically?
• Does the Investments Commission’s and Australian Security system of complaints allow elections to be submitted electronically?
• Can the system effectively generate income statement, cash flow and balance sheet statement?
• Does the system enable executives to analyze data and generate variance reports?
Q11. Why is it important to circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations?
Lower-level executives or group leaders should check the budget to ensure that their earlier inputs are usually taken into account in the regional as well as team budgets, which have been also taken into account in the final total budget (Baxter and Hunton, 2011).
Q12. Briefly explain how using previous financial data can help determine allocations for resources.
In the case of an increase in the budget, resource allocation is based on the allocation in the previous period (D'Ascenzo, 2014). If a strategy of maintaining overall stability is to be adopted, and then based on previous performance, the process of allocating resources will be relatively simple.
Q13. Give an example of a budget and/or budgeted statement that must be prepared in accordance with statutory requirements.
Budget balance sheet: The BBS contains each the items in the common balance sheet. The difference is that it’s a forecast of balance sheet for the future budget period. It is based on many supported calculations and its accuracy might vary depend on the authenticity of the budget model input. The BBS is very helpful of valuable for test whether the company’s projected economic position is reasonable. It reveals solutions that cannot be financially supported (for example, a large amount of debt is required) that management can cure by changing the basic model. A BBS must be constructed for every period covered by budget model (instead of just the end of the period) because that budget analyst can verify whether the estimated cash flows are sufficient to provide sufficient funding for the entire company budget period. It should be assumed that the sum of the asset side, moreover equity side of balance sheet is equal to each other, nevertheless this might not be a case if BS was compiled utilizing an incorrectly configured electronic spreadsheets. If consequently the person preparing the budget can choose to manually add the difference among two totals into an "additional" account, for example "other assets" as well as "other capabilities." If this number is large, it may question the dependability of the data in the balance sheet, and might trigger a review of the formulas and assumptions that make up the information.
Loss and Profit budget: Budget is a necessary tool management that enables owners of business to monitor financial or economic impact of their operating plans and business decisions. Monitor business outcomes based on prepared budgets so that owners of business can follow whether their business is attaining its goals or objectives and maintaining profitability.
The loss and profit budget is one-page synopsis of expected expenses and income. It’s generally compiled once a month covers twelve months, and is depend on a fiscal year. The budget is usually prepared jointly with accountants.
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