Manage Finances Assessment Task

BSBFIM601 Manage Finances
Assessment Task 1 Instructions
Provide answers to all of the questions below:
1. Identify and describe financial probity requirements for businesses.
The principle of Financial Probity states that all businesses needs to adhere to ethical standards while
conducting the operations of the business. The employees need to execute their duties in an effective
manner in an honest and transparent manner.
2. Identify four examples of what would be consider fraudulent behaviour in regard to company finances.
The four examples which can be provided for fraudulent behaviour in regards to company finances are listed
below:
 Embezzlement
 Payoffs and Kickbacks
 Skimming
 Concealment of losses and cooking of profits in books of accounts.
3. Identify the requirements for audited accounts and the purpose of an audit report.
The auditing process of financial accounts is a detailed investigation conducted by a professional auditor to
ensure that the information which is covered in financial statements is fairly and accurately represented. The
auditor after reviewing the financial statements forms an opinion on the accuracy of the annual reports and
this opinion is covered in the audit report. It is a mandatory requirement for a business which is listed to
conduct audit of the financial statements.
4. Describe the principle of cash accounting one advantage and one disadvantage of cash accounting.
The process of cash accounting is only concerned with cash inflows and cash outflows for a business and
the same are recorded under this process. The process only records cash which is actually received as
revenue and cash which is paid as expenses for the period and does not considered any accrued expenses
or income.
The advantage of cash accounting system is listed below:
 The maintenance of the books of accounts is quite simple under this method and the method is also
quite simple to understand.
The disadvantage associated with the cash accounting method is provided below:
 The method does not offer any accuracy as only cash transactions are considered while accrued
expenses and revenue are ignored.
5. Describe the principle of accrual accounting and one advantage and one disadvantage of accrual
accounting.
As per the accrual system of accounting, expenses and revenue are recorded as and when they take place
and it is not necessary whether cash is received or paid for the transaction. This system provides a more
accurate presentation of the financial information of the business.
The advantages which are associated with accrual system of accounting are listed below:
 The method provides a more accurate presentation of financial information as both cash and
accrual based transactions are considered for the purpose of recording.
The disadvantages which can be identified for the accrual system of recording are listed below:
 It is difficult for small companies to maintain this process as there is a shortage of staff for handling
the accounts.

BSBFIM601 Manage Finances Student Assessment Task 3
6. Explain the four main taxation and superannuation obligations for a business. Briefly discuss each
obligation.
The four main taxation and superannuation obligations which can be identified for a business are listed
below in details:
 ABN number: One of the main requirements for a business is to acquire an ABN number and this is
mandatory for conducting the operations of the business. An ABN number is crucial for conducting
operations with other businesses and governmental bodies.
 Goods and Service Tax: The business needs to maintain a register for GST which is applicable on
the goods and services which is provided by the company. The business primarily needs to register
itself under GST regulations.
 PAYG Scheme: The PAYG scheme allows the business to pay portions of tax liabilities for the
business in instalments. The business here pays expected tax liabilities so that the total tax liabilities
can be reduced.
 Superannuation: The management of the company also needs to contribute appropriately to
superannuation requirements for the employees. The business needs to contribute around 9.5% on
behalf of the employees towards superannuation contributions.
7. Identify the Act that details requirements for financial reporting and auditing and, explain the
requirements for companies for preparing and lodging financial reports under this Act.
The Corporation Act of 2001 requires companies to present financial information in the annual report and
the same should be audited so that the financial information is showing true and fair view. The financial
statements needs to be formulated considering all relevant accounting standards and the same should be
represented in an appropriate format so that full disclosure is available to the users of the financial
statements.
8. Explain the requirements for registered foreign companies regarding preparing and lodging financial
reports.
The foreign companies which are listed needs to lodge their financial statements with ASIC at least once in
every calendar year. It is to be noted that the time frame between two lodging cannot exceed a period of 15
months. The financial statements should be appropriately presented in a accepted conceptual framework
adhering to all accounting standards.
9. Identify the current company tax rate for both smaller and larger businesses.
The tax rate which is applicable for small companies depending on the threshold which is less than $ 25
million than it is 27.5%. On the other hand, the tax rate which is applicable for big companies is 30%.
10. Explain the process by which a business reports GST to the Australian Tax Office.
The business reports information in relation to GST applicable on the business are reported in Business
Activity Statement (BAS). The BAS mainly includes information in relation to GST requirements and
liabilities of a business.
© J&S Learningwork 2018 Strathfield College RTO Number: 91223 Page 2

BSBFIM601 Manage Finances Student Assessment Task 3
11. Identify the penalty rate to be applied if a supplier does not provide an ABN?
In case a supplier does not provide ABN and if the total payments associated with a transaction is more than
$ 75 excluding GST amount, then an amount which is equivalent to the top tax rate can be withheld.
12. A non-profit organisation needs to register for GST after it has a turnover of more than how much?
In case of a non-profit organisation, if the turnover of the business exceeds $ 150,000 or equals the same
then the business must mandatorily register for GST provisions. If the turnover of the business is less than $
150,000 than the business can opt for registration or can avoid the same.
13. Explain the difference in Pay As You Go withholding obligations for employees and contractors.
The difference between Pay As You Go Withholding obligations for employees and contractors are listed
below:
 As an employee, the person needs to withhold an amount for the purpose of taxation.
 A contractor does not need to hold the amount of taxation from making any kind of payments.
Assessment Task 2 Instructions
Carefully read the following:
Grow Management Consultants specialises in leadership consultancy. It has been operational for five years.
The company offers a range of services to assist companies to assess leadership behaviour of existing
managers and performance metrics. They also design and implement customized leadership programs
based on the assessment. Services are offered Australia-wide.
The company employs a General Manager (you), 2 Principal Consultants (who are also Directors), 1 Senior
Consultant, an Administration Officer and Receptionist.
Over the last two years, the company has diversified, and now offers regular professional development
workshops on all aspects of leading and managing staff. These workshops are conducted approximately
every 3 months in all major cities including Sydney, Brisbane and Melbourne. In 2016 – 2017, the company
ran a total of 36 workshops. The company has also recently produced an E-book about leadership
techniques.
The intention is to replace the workshops with the annual conference in the next financial year, as the
workshops were not well attended. Client feedback and continued business indicates a personalized,
company focused approach in the form of consulting services is the service of choice.
The E-book has had reasonable sales, but there needs to be a wider selection of books, as well as more
marketing. The plan is to generate $10,000 worth of sales for the e-books during the next financial year and
increasing over time.
As the General Manager for the company and with responsibility for finances, you are currently completing
the financial planning for the year ahead. This involves a review of the company’s business plan, previous
year’s profit and loss statement, the current business plan and strategic directions and cash flow
statements. Based on the review, you will be establishing budgets and allocating funds.
In developing the budget, you are to assume a 5% increase in cost of sales, as well as a 10% increase in
sales for consulting services and executive search.
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