Manage Finance

This document provides a comprehensive guide on managing finance. It covers topics such as the requirements for financial probity, principles of financial and accounting systems, GST implementation, audits, ATO and GST requirements, and company tax and PAYG. The document offers insights into the key concepts and regulations related to finance management.

MANAGE FINANCE

TABLE OF CONTENTS
TABLE OF CONTENTS................................................................................................................2
TASK 1............................................................................................................................................1
Q1 Requirements for the financial probity..................................................................................1
Q2 Principles of financial and accounting systems.....................................................................1
Q3 What is GST and how is it implemented? Who is required to register for GST? What piece
of legislation primarily governs GST?........................................................................................2
Q4 Audits and the purpose of audits............................................................................................2
Q5 Requirements of ATO and GST for given scenarios............................................................2
Q6 Requirements of Company tax and Pay As You Go (PAYG)...............................................3
REFERENCES................................................................................................................................5

TASK 1
Q1 Requirements for the financial probity
Financial probity refers to strict obedience to code of ethics which are based over absolute
honesty, mainly in the commercial matters and going beyond the legal requirements.
Requirements of the financial probity
While undertaking the Public Construction Procurement, the agencies must
a) To conduct the Public Construction Procurement in the manner which is consistent with
the Public Sector Values;
b) Treating tender participants equally and fairly and to avoid giving any advantage to the
tender advantage over other.
c) Maintaining confidentiality of the participants and their confidential information, it also
includes the price sensitive information and the intellectual property (Onuora, Nwanneka
and Christian, 2019).
d) Ensuring tender processes, evaluation processes, negotiations and the contract
management procedures are transparent, auditable and also accountable
e) Proactively managing and identifying conflict of interests whether potential, real or
perceived adequately and also in accordance with the applicable legal & policy
requirements including the applicable Codes of conduct of the Victorian Public Sector.
Q2 Principles of financial and accounting systems
The accounting principles ensure that the companies follow certain standards to record
how the economic events are to be recorded, recognised and presented.
Consistency Principle: It states that when accounting principle or method is selected for the
business, business is required to follow and stick to the accounting method throughout all
accounting periods.
Cost Principle: The company should records the liabilities, assets and the equity at original costs
at which they have been purchased or sold. Real value changing over the time is not reflected for
the reporting process.
Going concern principle: It has special importance in accounting. The principle assumes
business would continue to operate and exists in foreseeable future (Mensah and Chiang, 2019).
It allows the company to defer the prepaid expenses over future accounting periods instead of
recognising them at once.
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Matching principle: It requires that revenues should be matched with the expenses at same
time. In accrual accounting there should be debit for every credit.
Materiality principle: Item is considered material for the business if it could influence or affect
decision making of individuals reviewing the financial statements. It requires disclosure of
material events.
Full disclosure principle: Important information which could impact understanding of the
readers’ for financial statements are required to be included or disclosed in statements.
Q3 What is GST and how is it implemented? Who is required to register for GST? What piece of
legislation primarily governs GST?
Goods & Service Tax is the value added taxation levied over most goods and the services
which are sold for the domestic consumptions. It is broad based tax rate of 10% over most goods
and services consumed or sold in the Australia (Wu, 2020). It is collected by the business
whenever goods or services are sold and pays revenues to ATO.
A business is required to register for the GST if it has turnover of more than $75000 or
$75000. The nonprofit organization is required to register if turnover more than $150000 or
$150000.
The primarily legislation governing GST is the Goods or Service Act, 1999 which is
known as GST Act. It is applicable to Good, service and the transactions related to the real
property, rights or obligations.
Q4 Audits and the purpose of audits
Audit is examination or inspection of financial reports of organization as presented in
annual report by the independent professionals or bodies. Financial reports include income
statement, balance sheet or the cash flow statement.
The purpose is to ensure that the firm has recorded all the financial transactions, events and
items in accordance with the accounting principles. It ensures that company complies with all the
requirements of applicable laws and legislations. Auditors are required to asses the financial
records in accordance with the auditing standards (Brown, 2018). Main purpose of audit is to
form an opinion that the financial statements as whole are free from errors or misstatements and
gives true and fair view of the financial performance and position of the entity.
Q5 Requirements of ATO and GST for given scenarios
a) Names of GST free products and services
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1. Educational Courses
2. Precious metals
3. Water, sewerage and drainage
4. Exports
5. Sales through a duty free shops
b) Sales made on eBay
On the sales made over eBay, seller is required to comply with the applicable taxation
laws. Seller’s responsibilities related to sales on eBay includes:
Paying GST over eBay selling fees
Business based in Australia has to pay GST over the selling fee, regardless of the eBay site being
used for sales unless exempted. Registered business for GST it could send ABN for getting GST
deducted invoices.
Paying GST over eBay sales
Company is required to pay for GST. It has to include the GST in price for listed items for
paying final prices. eBay has the obligation to collect GS over $1000 imported to the Australia.
Thus, business is required to pay GST on eBay sales.
c) What is ABN and how it helps the business?
ABN is the 11 digit unique number which identifies business to government. The ABN is
used to identify the business to the others when invoicing and ordering. To avoid PAYG on the
payment, to claim GST credits and to get Australian domain name (Anderson, Dickfos and
Brown, 2016). It helps the business to keep track over the business transactions for taxation
purpose.
Q6 Requirements of Company tax and Pay As You Go (PAYG)
Company tax is the tax at which companies are required to pay tax. All the companies have
to pay the federal tax at 30% on the taxable income, excluding the small business corporations
that are subject to the reduced rate of 27.5%.
PAYG is acronym used for 2 different processes for the business: PAYG withholding and
installments. Business is required to register for PAYG before making payment subject to the
withholding. When ceased to be employer it is required to cancel the registration of PAYG
withholding (PAYG. 2020). Before entering to contract or work agreement it has to ensure that
worker is allowed legally for working in Australia.
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REFERENCES
Books and Journals
Onuora, J.K.J., Nwanneka, O. and Christian, O., 2019. PROBITY OF FINANCIAL
STATEMENT AND FORENSIC ACCOUNTING
TECHNIQUES. INTERDISCIPLINARY JOURNAL OF AFRICAN & ASIAN STUDIES
(IJAAS), 5(2).
Mensah, Y.M. and Chiang, C.C., 2019. The Pendulum Effects of Legislation on the Probity of
Financial Statements.
Wu, H., 2020. Towards a new research field: tax analytics using Australian Taxation Office
data (Doctoral dissertation, University of Sydney).
Brown, C., 2018. Submission to the Inspector-General of Taxation, Review into the Australian
Taxation Office’s use of Garnishee Notices.
Anderson, C., Dickfos, J. and Brown, C., 2016. The Australian Taxation Office-what role does it
play in anti-phoenix activity?. Insolvency Law Journal. 24(2). pp.127-140.
Online
PAYG. 2020. [Online]. Available through : <https://www.ato.gov.au/Business/PAYG-
withholding/>.
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