T-1.8.1_v3 Details of Assessment Term and Year 3, 2019 Time allowed 8 Weeks Assessment No 1 Assessment Weighting 100% Assessment Type Portfolio Due Date Week 8 Room 5 Details of Subject Qualification...

T-1.8.1_v3
    Details of Assessment
    Term and Year
    3, 2019
    Time allowed
    8 Weeks
    Assessment No
    1
    Assessment Weighting
    100%
    Assessment Type
    Portfolio
    Due Date
    Week 8
    Room
    5
    Details of Subject
    Qualification
    BSB61015 Advanced Diploma of Leadership and Management
    Subject Name
    Financial Management
    Details of Unit(s) of competency
    Unit Code (s) and Names
    BSBFIM601 Manage finances
    Details of Student
    Student Name
    
    College
    AAI (Brisbane)
    Student ID
    
    Student Declaration: I declare that the work submitted is my own and has not been copied or plagiarised from any person or source. I acknowledge that I understand the requirements to complete the assessment tasks. I am also aware of my right to appeal. The feedback session schedule and reassessment procedure were explained to me.
    Student’s
Signature: ____________________
Date: _____/_____/_________
    Details of Assessor
    Assessor’s Name
    SINDHU NAIR
    Assessment Outcome
    Assessment Result
    |_| Competent |_| Not Yet Competent
    Marks
     /100
    Feedback to Student
Progressive feedback to students, identifying gaps in competency and comments on positive improvements:
    
    Assessor Declaration: I declare that I have conducted a fair, valid, reliable and flexible assessment with this student.
|_| Student attended the feedback session.
|_| Student did not attend the feedback session.
    Assessor’s
Signature: ___________________
Date: _____/_____/________
    Purpose of the Assessment
    The purpose of this assessment is to assess the student in the following learning outcomes:
    Competent
(C)
    Not Yet Competent
(NYC)
    1.1 Review and analyse previous financial data to establish areas which have generated a profit or loss
    
    
    1.2 Undertake research to review reasons for previous profit and loss
    
    
    1.3 Review business plan to establish critical dates and initiatives that will require or generate resources in the next financial cycle
    
    
    1.4 Analyse cash flow trends
    
    
    1.5 Review statutory requirements for compliance and liabilities for tax
    
    
    1.6 Review existing software and its suitability for financial management
    
    
    2.1 Use previous financial data to determine allocations for resources
    
    
    2.2 Make informed estimates of new items for inclusion in budget
    
    
    2.3 Prepare budgets in accordance with organisational requirements and statutory requirements
    
    
    3.1 Circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations
    
    
    3.2 Manage risks by checking there are no opportunities for misappropriation of funds and that systems are in place to properly record all financial transactions
    
    
    3.3 Review profit and loss statements, cash flows and ageing summaries
    
    
    3.4 Revise budgets, as required, to deal with contingencies
    
    
    3.5 Maintain audit trails to ensure accurate tracking and to identify discrepancies between agreed and actual allocations
    
    
    3.6 Ensure compliance with due diligence
    
    
    4.1 Ensure structure and format of reports are clear and conform to organisational and statutory requirements
    
    
    4.2 Identify and prioritise significant issues in statements, including comparative financial performances for review and decision making
    
    
    4.3 Prepare recommendations to ensure financial viability of the organisation
    
    
    4.4 Evaluate the effectiveness of financial management processes
    
    
    Assessment/evidence gathering conditions
    Each assessment component is recorded as either Competent (C) or Not Yet Competent (NYC). A student can only achieve competence when all assessment components listed under “Purpose of the assessment” section are recorded as competent. Your trainer will give you feedback after the completion of each assessment. A student who is assessed as NYC (Not Yet Competent) is eligible for re-assessment.
    Resources required for this Assessment
    · Computer with relevant software applications, access to internet and weekly eLearning notes
    Instructions for Students
    Please read the following instructions carefully
· This assessment has to be completed |X| In class |X| At home
· The assessment is to be completed according to the instructions given by your assessor.
· Feedback on each task will be provided to enable you to determine how your work could be improved. You will be provided with feedback on your work within two weeks of the assessment due date. All other feedback will be provided by the end of the term.
· Should you not answer the questions correctly, you will be given feedback on the results and your gaps in knowledge. You will be given another opportunity to demonstrate your knowledge and skills to be deemed competent for this unit of competency.
· If you are not sure about any aspects of the assessment, please ask for clarification from your assessor.
· Please refer to the College re-assessment for more information (Student Handbook).
ASSESSMENT BRIEF
In this assessment task, you will use your skills and knowledge to undertake budgeting, financial forecasting and reporting and to allocate and manage resources to achieve the required outputs for the business unit. You work will also include contributing to financial bids and estimates, allocating funds, managing budgets and reporting on financial activity.
The assessment is divided into three parts and weight allocations as below:
PART A: WRITTEN REPONSES – 25%
PART B: MANAGE FINANCES PROJECT ON A SIMULATED WORK ORGANISATION – 65%
PART C: PRESENTATION OF AUSTRALIAN HARDWARE FINANCIAL ANALYSIS – 10%
PART A: WRITTEN REPONSES – 25%
Instructions: This part of the assessment comprises the knowledge testing required for the unit BSBFIM601. This part includes 8 questions and you must respond to all. Use the spaces below to respond to the questions. Weights and marking allocations are in the marking allocating table.
    Question 1. Planning for financial management. (2 marks)
Explain why it is necessary for all business organisations to have effective financial management systems and explaining how the information held in financial management systems contribute to ongoing business performance and business planning.
    
Financial management is one of the most crucial aspect for an organization. The financial management helps in analysing the financials of the company. With the help of effective financial management, the company is able to oversee and manage its income, expenses and assets with a motive to maximize its profits and help in establishing and maintaining stability.
The proper financial management helps in improving the long term as well as short term business performance. It also helps in analysing the performance of the company, its profitability and overall performance. It also focus on ensuring compliance with tax and accounting regulations. It helps in quantifying the budget planning and offers flexibility and expandability for the company to enhance growth and change.
    Question 2. Establishing budgets and allocated funds. (3 marks)
a) What is a Budget?
b) What data might inform a new budget?
c) How does analysis of previous financial data assist projected resource estimates and allocations?
    a. Budget can be said as the estimation of revenues and expenses over the period of time. It is made for a particular period and is usually made on the basis of the estimation and historical data. It includes different budgets like the sales budget, production budget, manufacturing overhead budget, projected income statement, projected balance sheet. Thus it helps in planning and forecasting. The budgets can be made for short term or the long term for different departments. Usually the budgets are made for short term for planning and estimation of different things and aspects.
b. Some of the major data which would be required to prepare the budget includes the business plan, the historical financial statements or the historical information, the economic aspect or the environment. The financial goals and objectives that the company wants to achieve, the strategies and the costs and some information from the key personnel. These are some of the aspects which provides information to prepare the budget.
c. The previous financial data helps in estimation and allocation of the income as well as expenses. From the previous financial data, one is able to estimate and project the trend of the income and expenses which helps in making the budget.
    Question 3. Implement Budgets. (4 marks)
a) How do profit and loss statements cash flow and using aging summaries contribute to new budgets?
b) How can you ensure that managers and supervisors in the organisation understand the budget and understand their reporting requirements with regard to financial management?
c) Budgets are used to identify and track discrepancies between agreed and actual allocations. Explain.
d) How do budgets contribute to analysis of existing financial management approaches?
    
a. The profit and loss statements presents all the operating income and expenses of the company, with the help of profit and loss account, one can estimate and project the income and expenses of the company on the basis of the historical profit and loss statement. The cash flow statements shows all the cash flows and the trend of the cash particularly the sources and the use of cash, with this we can make the budget for the cash flows. The aging summaries shows the trend of bad debts or uncollectibles as well as the accounts receivables which can be used in making the new budget as it helps in telling about the trend of accounts receivables.
b. It is important to have a tram briefing which will help in communication between the team members and would help in understanding the nature of the budget as well as the goals of the company. The briefing should be done once in a month so that the monthly plan and budget is clear and the team can match up with the performance and the financial goal of the company. The team can also discuss about the aspects, so that the management can think over it.
c. Budget is considered as the estimate amount of the revenues and expenses over the future period. The budget is compared with the actual statement to know the variance. Variance is the difference between the actual and the budgeted statement. If the cost in the budget is more than actual statement, then the variance is favourable whereas if actual cost is more budgeted then the variance is unfavourable.
d. Budgets are considered as the projected income and expenses which is based on a plan. This helps in planning and improving the performance of the company. Budgets helps in analysing and planning for different aspects, it helps in evaluating the performance of different activities.
    Question 4. Explain financial probity. (3 marks)
    
Financial probity is where the company has to adhere strictly to the code of ethics which is based on honesty especially in the commercial aspect. It should include all the ethical information and aspect. The financial data should be open and should not have any hidden aspects and monetary matters.
    Question 5. List at least 10 forms of legislations and conventions (Australian, international and/or local) that could apply to financial management. (3 marks)
    
· Privacy Act, 1998
· Fair work act 1994
· Minimum age convention 1973
· Equal remuneration convention 1951
· Discrimination convention 1958
· Disability discrimination Act 1992
· Convention on the rights of person with disabilities
· Equal opportunity Act 1994
· Occupation safety and health act 1984
· Small Business Fair dismissal code
    Question 6. Personnel working in the financial services division of a company need to understand and be able to explain principles of accounting and financial systems (Accounting and Financial Information Systems- AIS and FIS). What are accounting and financial management systems and how do they assist business operations (2 marks)
    
Financial management is one of the most crucial aspect for an organization. The financial management helps in analysing the financials of the company. With the help of effective financial management, the company is able to oversee and manage its income, expenses and assets with a motive to maximize its profits and help in establishing and maintaining stability.
The proper financial management helps in improving the long term as well as short term business performance. It also helps in analysing the performance of the company, its profitability and overall performance. It also focus on ensuring compliance with tax and accounting regulations. It helps in quantifying the budget planning and offers flexibility and expandability for the company to enhance growth and change.
Accounting management system helps in organizing the financial data as well as managing the financial obligations. It helps in collecting the information, reports, supporting the policy decisions and preparing of the budgets.
    Question 7. Explain the requirements for each of the following: (3 marks)
a. Goods and Services Tax
b. Company Tax
c. PAYG
    
a. For the goods and services tax, the business should have the turnover of 75000 or more, if it’s a non profit organization then the turnover should be more than 150000 per year. The company provides taxi travel for the passengers which is part pf the business. So, the taxi drivers and the owners also have to file for GST
b. The company tax requirements varies from business to business. The company tax is compulsory as soon as the business starts and all the requirements and tax filing should be done as per the Australian Taxation office.
c. PAYG is applicable by the company for its employees as well as other workers. The company should register itself for PAYG withholding to withdraw the amount from PAYG, the company should also cancel the PAYG withholding of the employee if he is not working with the company.
    Question 8. Scenario for audit reporting. (5 marks)
You have been asked to act as a project manager to assist with data collection, provide data, ensure that any other assistance is provided and collaborate with regard to writing the audit report
During the year the organisation transacted a number of mergers and acquisitions. You have been asked to pay special attention to the acquisitions and to check the due diligence processes. You also need to determine whether any changes and adjustments need to be made to the current budgets.
Explain what all this means and how you will manage the process.
    
In answering those questions, you will need to also address the following questions:
a. What is an internal audit?
Internal audit is the audit of the company’s internal control as well as kits corporate governance and the accounting of the company. The internal audit ensures that the company complies to the rules and the regulations of the company. It helps in maintaining the accurate and timely financial reporting as well as the data collection of the accounts. It also helps in improving the operational efficiency of the company as it helps in identifying the errors and other lapses.
b. How does it mitigate the risk of management frauds?
It helps in mitigating the risk of management frauds as the internal control is analysed as well as the internal application of the rules and accounting aspects is analysed. It helps in maintaining the accurate and timely financial reporting as well as the data collection of the accounts. It also helps in improving the operational efficiency of the company as it helps in identifying the errors and other lapses.
c. Are there particular statutory requirements that should be followed?
The company should follow the statutory authority by the Financial Management Act of 2006, schedule 1 where the internal audit is done so as to ensure than effective controls of the company are at its place and the company is responsible for the financial aspect.
d. What does due diligence mean in terms of finances and financial reporting?
Due diligence is important and covers different aspects and areas which includes the legal aspect, the information technology part, the operational, marketing as well as the financial aspect and matter. It helps in providing different aspect of the potential investors for the understanding of the company’s sustainable economic earnings, the historical trend of the financials. It is the investigation of the audit of the investment.
e. What reports might be prepared for the ATO?
Some of the major reports includes:
· Income tax return
· PAYG withholding annual reports
· Fringe benefit tax return
· GST annual return
· Taxable payments annual report
· Business activity statements
PART A: MARKING TABLE (for trainer use only)
The assessor needs to use judgment in providing marks for the tasks based on learner performance.
    Question/Task Number
    Marks Allocated
    Marks received
    Q1
    2
    
    Q2
    3
    
    Q3
    4
    
    Q4
    3
    
    Q5
    3
    
    Q6
    2
    
    Q7
    3
    
    Q8
    5
    
    Total
    
PART B: MANAGE FINANCES PROJECT – 65%
SIMULATED WORK ORGANISATION & BRIEF ON THE FINANCE PROJECT
This is a series of practical and theory activities that will enable you to demonstrate skill and knowledge – and produce end products suitable for use in the workplace. In this PART, you are required to work on a finance management project to determine the financial condition for “Australian Hardware” the simulated case study below. Click on the icon that includes the information on the Simulated Work Organisation.
    
CONTEXT
In the simulated organisational context you will assume responsibility as a newly hired finance manger of the simulated workplace environment who leads a team of finance. Your trainer will act as your supervisor in this simulated work task. You will be progressively completing all the tasks relating to planning for financial management; reviewing profit and loss statements; cash flows and aging summaries; reviewing and revising the budget of this organisation, allocating funds, communicating with your team and other stakeholders, meet compliance requirements and analysing the effectiveness of existing financial management by providing your own recommendations.
To demonstrate competency you will need to complete all the tasks assigned to you in relation to your personal development portfolio.
What is required?
You are required to explore the simulated organisational documents (CoffeeVille) or use your own workplace documents, analyse the various situations mentioned within the tasks and respond to those tasks. You are also required to
· plan for financial management
· read and review profit and loss statements, cash flows and aging summaries
· prepare, implement and revise a budget which aligns with the business plan, is based on research and analysis of previous financial data and cash flow trends, and meets all compliance requirements
· contribute to financial bids and estimates
· establish a budget and allocate funds in accordance with statutory and organisational requirements
· communicate with other people including: reporting on financial activity and making recommendations, identifying and prioritising significant issues, ensuring managers and supervisors are clear about budgets
· analyse the effectiveness of existing financial management approaches including reviewing financial management software, managing risks of misappropriation of funds, ensuring systems are in place to record all transactions, maintaining an audit trail and complying with due diligence
Various stakeholders in this context (for the simulated organisation Australian Hardware)
· Finance Manager – You
· Owner/Supervisor – Your trainer
· Customers, employees and other stakeholders – Your fellow classmates
There are no specific word limits on your Finance Project but it must follow the structure illustrated next and the complete all the tasks within the template provided. It must also include all screenshots and appendix attachments mentioned within the tasks.
    
FINANCIAL ANALYSIS PROJECT FOR
AUSTRALIAN HARDWARE
Prepared by:
Position:
Date:
STRUCTURE, TABLE OF CONTENTS & MARKING ALLOCATIONS
(For trainer use only)
    CONTENT / TASK DETAILS
    MARKS ALLOCATED
    MARKS RECEIVED
    1. INTRODUCTION OF THE BUSINESS
    8
    
    2. STATUTORY REQUIRMENTS OF THE BUSNIESS
    8
    
    3. REVIEW AND MAKE JUDGEMENT ON FINANACIAL STATEMENTS
    10
    
    4. BUDGET REVISION
    5
    
    5. RECOMMEND CHANGE IN BUDGET
    10
    
    6. FINANCIAL SOFTWARE
    10
    
    7. ENSURE DUE DILLIGENCE
    10
    
    8. OTHER RECOMMENDATIONS
    4
    
    APPENDIX 1 (presentation slides)
    N/A
    N/A
    TOTAL
    65
    
1. INTRODUCTION OF THE BUSINESS (8 marks)
This section should include organisation descriptions, products and services, location, vision and mission statement and its core operations. You are required to review & analyse organisational information and policies in this section to plan for financial management.
About us (Description)
Australian domestic hardware chain.
CEO: Holden Greenwright
What we offer (products and services)
Australian Hardware provides the finest hardware, gardening materials and building materials from Australia and the world.
Where we are (location)
Australian Hardware, Wollongong Store
NSW - Sydney
Vision
We do not sell really cheap hammers. You can buy a cheaper hammer somewhere else. We sell the unique experience of buying just the right tool for today's needs - Eric Greenwright.
The success of Australian Hardware depends on our people. Australian Hardware can only thrive and provide employment and growth opportunities as we continually improve ourselves and the work we do.
We recognize, however, that success is not measured by sales alone. We are measured both by the way we achieve our goals and by our own real achievements. We believe that commitment to uncompromising values ​​and integrity should always guide our decisions and actions as we pursue our goals.
Mission
Australian Hardware provides the finest hardware, gardening materials and building materials from Australia and the world. Australian Hardware is committed to providing value to customers and merchants with low prices every day, product quality, specialized service, community involvement and environmental responsibility.
Core Operations
Product management, order processing, receipt of material, shipment of material, sales and store maintenance.
2. STATUTORY REQUIRMENTS OF THE BUSNIESS (8 marks)
List and explain the application of statutory and legislative requirements as they apply to financial management within the business operation.
All facets of financial management will reflect the following:
1. Activities will be conducted ethically
2. All activities will reflect the strategic objectives of the company.
3. The activities will be carried out in addition to achieving the objectives and financial references of the current business plan.
The main requirements for opening and maintaining an Australian business are:
1.An Australian business number (ABN)
2.The tax on goods and services (GST)
3.A tax file number (TFN)
As well as :
Fair trading: laws that ensure your business operates fairly and competitively and that you inform and protect your customers.
The Privacy Act: There are privacy laws around the collecting and storing of your personal information.
Anti-bullying laws: Bullying at work occurs when a person or group of people, repeatedly behaves unreasonably toward a worker and puts the worker's health or safety at risk.
All activities will comply with the following, where applicable:
Operating and reporting requirements of the Australian Securities and Investments Commission (ASIC)
Australian Accounting Standards (AAS)
Relevant state and federal legislation
Relevant contractual requirements of state or federal government
All procedures will be designed to support the successful operation of Australian Hardware, Wollongong store operations and services.
3. REVIEW AND MAKE JUDGEMENT ON FINANACIAL STATEMENETS (10 Marks)
In this section review and analyse the profit and loss statements, cash flows and aging summaries and make a judgment on actual and projected forecasts. Did you find any significant issues? Does it meet all compliance requirements and liabilities for tax? explain your answer.
    Performance Area
    Performance Objectives
    Any significant issue
    Compliance Requirement
    Financial Performance overall
    Making a ratio of what is expected on Check, Payroll, Pretty cash, undeposited money and total cash on hand there are no significant problems.
    Unexpected amount of cash drawer appeared. The expected value was $ 650. The cash drawer value was $ 11,559.
Equity ratio was supposed to close at $ 794,574.00 and the difference was approximately $ 198,00.00. Current year earnings also had a low, expected $ 232.00.00 and the final value was $ 153,940.00
    Stay tuned for these unexpected cash drawer, as well as the reasons for dropping current year earning
    Profit and loss statement
    We had an increase in sales of timber and hardware, which of course caused an increase in the purchase of material. Exceeding the initial expectations. The expenses with Marketing were compatible and the depreciation was higher but still within the expected. Insurance accorded with the projections.
    A $ 700 value was found and not specified in other fees. And there was a large and important increase in the value of Wages and employee expenses. That was $ 400 and ended up being an expense of $ 6000. Water consumption also increased significantly for no apparent reason.
    Review the reasons for increasing the amount spent on staff and make staff aware of water use.
    Cash flow
    Net income from cash flow from operating activities was expected at $ 232,768.00 and was $ 153,940. An increase in GST collected was also noted, but possibly occured in parallel with increased sales.
    Net Cash Flows from Operating Activities was expected at $ 236,018.00 and was $ 145,212.68. Cash at the end of the period was expected at $ 737,823.00 and was significantly lower at $ 647,017.68 which reflected the final value of $ 25,212.68 in increase for the period.
    Check the values in the Operating Activities.
    Aging Summaries
    Long term liabilities $200,00.00 (Bank Loans)
    Payed
    Payed
4. BUDGET REVISION (5 Marks)
Revise the budget. You may wish to use a table or display the revised sections of the budget. Once completed with the revision, explain why do you think it aligns with the business operation plan?
    
    WAGES AND SALARIES
    WATER...