Report on Accounting (Doc)

Running head: ACCOUNTING 1
Accounting
Name:
Institution:
Date:

ACCOUNTING 2
Accountancy
1. Prepare a report that outlines a board’s additional requirements for ASX listing on
the stock exchange.
The company must have at least 300 shareholders who are non affiliated with holdings valued
at least $2000 each. For a company to be listed in the ASX, it should have a working capital
of $1.5 million. However, if the required A$1.5 million for working capital and does not
have , then the company must show that it can get this amount of money in its revenues for
the first quarter (Scheffé, 2010) . The companies that want to list in the ASX are supposed to
report on a half yearly and annual basis in Australia. For a company listed with no record of
revenues then the company’s are required to file quarterly cash flows.
Oil and gas companies and mining companies are required to file quarterly reports on cash
flow and activities including quoted and issued securities and changes in tenements.
2. The preparation, effort and care that goes into a report should reflect its usage.
Comment on this statement.
For companies that are listed in the stock exchange, definitely there is a lot that is involved
when preparing their reports and financial statements. A company in Australia will have to
report under IFRS, a lot of time is taken and care in preparation of the financial reports
because they will be used by all the shareholders who include the potential investors,
shareholders, creditors among others (Scheffé, 2010) . Unlike a company that is not listed in
the stock exchange , the companies listed have to ensure that the financial statements are
carefully prepared so that the stakeholders can get a true a fair view of the company. There
are standards that are to be adhered to when preparing the companies financial statements and
reports that include International Financial Reporting Standards(IFRS) the International

ACCOUNTING 3
Accounting.Standards among others. Therefore, there is a lot of effort and care when
preparing reports for a company that is listed .
3. How will a business determine the correct establishment of lodgment schedules?
The only way to determine the correct establishment of lodgment schedules is by looking
them up in the Australian Taxation Office or liaising with their agents.
4. Is consultation always necessary before the timetables for the implementation of
corporate governance requirements are developed?
It is necessary for companies to consult before implementing corporate governance
requirements because the consultancy offers best advice that the chairman and the board of
directors with the ways to implement good governance practices and frameworks. The
consultations are good as they provide information to companies on the relevant regulatory
updates and company laws that should guide the company. For high potential start ups, it is
important that they receive guidance on how to identify and implement appropriate
governance frameworks (Searle, Casella & McCulloch, 2009). Consultation is always
necessary as they review regulated entities compliance with respective corporate governance
codes and providing direction and guidance on evidence of appropriate compliance.

ACCOUNTING 4
5.To whom should adherence to ethical values apply and what is the value and purpose
of professional codes of ethics?
Ethics is the branch of knowledge that deals with the study of moral actions of individuals
and groups, as well as the rules and norms that govern that behavior in a given society.
Therefore, professional ethics is the part of ethics that governs the behavior of the individual
in his professional practice. Certainly this is one of the most diversified branches of ethics.
For example, for business managers, there is no basic ethical code. It is therefore up to
companies to define their own codes of conduct. Therefore, the professional Codes of
Conduct are rules that are dictated, in most cases, unilaterally by companies whose
application is generally not subject to external verification processes. A healthy and positive
corporate culture not only improves morale among employees but also increases employee
retention and productivity which translates to an improved financial benefit for the
organization (Searle, Casella & McCulloch, 2009).
6. Why is adherence to ATO reporting deadlines important?
It is important to adhere to Australian Tax Authority(ATO) reporting deadlines because
failure to meet these deadlines could make the company the company part with a lot of
money in form of penalties. Failure would also mean that the tax authority could file a notice
of federal tax lien and claim the company’s property. They could make the company forfeit
the refund and also file charges for tax evasion. Therefore adherence to ATO reporting
deadlines is important.

ACCOUNTING 5
7. Explain why work practise are influenced by the segregation of duties.
Segregation of duties is a building block for internal control and sustainable risk management
for an organization. This principle is based on sharing responsibilities of a process that is
meant to disperse a critical function of that process to several people in a department. Work
practice is influenced by segregation of duties (Bielefeld & Schneider, 2014). Work practice
is generally the adopted methods by companies where a task is performed with minimum risk
to people, materials, environment, equipment and processes. Thus, allocating jobs to different
people would make the task being performed to be done with a lot of care and therefore,
minimizing risks to the process and environment. Without separation of duties there is likely
to be disastrous outcomes because the goal of separation of duties is to prevent unilateral
actions from occurring in key processes where irreversible effects go beyond an organizations
tolerance for fraud or error.
8. Why is it important to state the assets and liabilities at their correct accrual basis
amounts at the start of the accounting cycle?
Accounting is designed to record and compile financial information intended for its users.
Accrual basis is a concept that is used to record in accounting and is more popular than cash
basis because it is more accurate and this is the reason why assets and liabilities are recorded
on accrual basis in any organization. Accrual basis records transactions in a particular period
of time based on their causal relationship. This makes it produce more accurate gauges of the
organizations performance in a particular period.

ACCOUNTING 6
9. What might rising trade debtors indicate and what action might you take?
An increase in trade debtors indicates that the company is not getting payments from its
debtors on time or it may also mean that the company is not doing enough to collect debts
from the creditors. This may cause cash flow problems for the company because it affects the
working capital. There are several actions that one can take to ensure that there is no increase
in trade debtors account. One of the ways is reducing credit terms, for example reduce the
credit period from 30 days to 14 days. The second method is to ask for a deposit, for any
order, customers have to first make a deposit. The company can also outsource the services of
a debt collector, another way of reducing trade receivables is by offering better terms for
payment upfront so that the customers can have easily flexible terms. They can also charge
interest for debt outstanding.
10. How could comparison between your organization and your competitors be useful?
Comparison between your organization and its competitors is important because it helps the
company to monitor the way competitors do business. After the comparison a company may
adjust the price they charge which would give them a competitive edge over the competitors.
Second they are able to learn how the competitors market and provide their goods to their
customers and how they deliver. This could help them become more efficient in their
distribution and how they market their products. A comparison is important because the

ACCOUNTING 7
company may learn more on how to enhance customer service and the after sale service that
the customers offer.
11Explain the procedures you might need to follow to access the financial data and
plans necessary for efficient operations of a team/ section/ division
There should be necessary structures put in place to ensure that no one gets authorized
financial data from a company. Therefore, if one requires financial data , he/she must seek
authorization from a senior member of the department who can provide the login details into
the data or any other necessary authorizations to access the information.
12. What are the likely cost implication for a business which expands rapidly?
A business is not supposed to grow very rapidly. The implication for expanding rapidly is
that the organization may outgrow its premises in the short term and therefore there is no
enough space for employees to work efficiently which could be costly for the organization
because it will be forced to rent additional space.Overgrowing leads to losing of morale
where the employees cannot cope with extra work , which means that productivity decreases.
Over growing may lead to funds shortage meant to meet expansion cost. The quality of
products may decrease and a the quality of service provided may drop which leads to a lot of
complaints and customers may be lost to competitors. The staff turnover may decrease due to
more workload which means that the organization will put more funds into recruitment and
training of new staff. This is additional cost to the company.

ACCOUNTING 8
13. You have been asked by management to prepare a report on why the personnel
budget has a large negative variance. What information would you include in your
report?
A personnel budget is a control tool that controls employment costs, forecasts and other
decisions can be made with reference to all the data available. A large negative variance will
only be as a result of paying salaries and wages more than what was budgeted. This may be
because the company hired more workers , the work took a longer time to complete or there
was a lot of overtimes wages paid out.
14. What are the key management information requirements?
Critical success factors (CSFs) are those areas that an organization needs to perform best if it
is to achieve overall success. For this reason , the management needs key information to help
manage the strategic direction of the organization. At all levels of management, information
is needed for decision making. At all levels of organization hierarchy, there are different
types of decisions made to control the different types of processes (Bielefeld & Schneider,
2014). There are different information needs that different levels of management require.
Top level managers and directors require strategic information that have an impact to the
entire organization. Some of the information that the management requires include the

ACCOUNTING 9
financial statements (this include; balance sheet, income statement and cashflows). Other
information may come inform of budget and other forms of forecasts (Donovan, 2006). Other
information that the management requires include information relating to customers to
understand their needs. Information on how to respond to customers needs, that is risk
management information. Also required is information relating to the process and the system.
15. What is the relationship between variance analysis reports and system integrity?
The relationship between variance analysis and system analysis is that when a variance
analysis is accurate the system has integrity. Variance analysis involves assessing the
difference between projected and actual figures of various items in the income statement.
Variance helps an organization maintain control over various expenses of the company by
monitoring actual expenses versus actual costs. A variance analysis that is effective enables a
company spot issues , trends , threats and opportunities (Hodge, 2008). With an accurate
variance analysis the accounting system is more useful thus ensuring that the system has
integrity.
16. Describe how the assigning of numbers in the chart of accounts can assist in
identifying accounts particularly with regard to organizations with many locations.
A company’s organizational chart serves as an outline for its accounting chart of accounts.
For example if a company has divided its operations into fifteen departments namely human

ACCOUNTING 10
resource, marketing, production , finance e.t.c, each of the department will have ist own
expenses which they will be accountable for (Hodge, 2008). Expenses for the various
departments may include phone, supplies, salaries e.t.c . A large corporation will require
thousands of accounts and that is why assigning of numbers in the chart of accounts is helpful
in indentifying which expense is for a certain department e.t.c.
17. With accrual accounting, when does the GST implications arise and why is it
considered to be better than the cash system?
The main difference between accrual and cash accounting is the time when liability to pay
GST occurs. One is liable to pay GST on cash basis once you have received it from your
customers. In this case, one cannot claim of credits on GST until you have paid for your
services or products (Lee & Hales, 2003). For example, if you receive payment from a
customer on Thursday for an invoice sent on Monday, then the income is recorded against
Thursdays date on your books. On the other hand if you chose the Accrual basis , GST is
recognized once invoiced. The accrual basis its considered more accurate.
18. Most organisations have a range if policies and procedures relating to the operation
of their accounting systems. How would you apply policies and procedures to operating
a computerized accounting system?
The following are ways in which one would apply accounting procedures and policies to
operating a computerized operating system. Ensure that the system has passwords and assign

ACCOUNTING 11
a specific person to manage the accounting system. Ensusre that all the data input is verified
and done by one person who is in charge (Kieso, Weygandt & Warfield, n.d.).
19. To what standards does the chart of accounts need to be prepared and what role has
the AASB in this?
Charts of accounts need to be prepared in the highest standards and therefore the role of
AASB is to ensure that they provide conceptual framework for purposes of evaluating
proposed standards. AASB also formulate accounting standards for other purposes within the
accounting field. Thus, it is a must that chart of accounts be prepared according to AASB
(Horngren, 2014).
he AASB is an agency of the Australian Government
he AASB is an agency of the Australian Government

ACCOUNTING 12
References
Bielefeld, B., & Schneider, R. (2014). Budgeting. Basel: Birkhäuser.
Donovan, S. (2006). Budgeting. Minneapolis: Lerner Publications Co.
Hodge, B. (2008). Accounting. London: Thomson Learning.
Horngren, C. (2014). Accounting. Toronto: Pearson Canada.
Kieso, D., Weygandt, J., & Warfield, T. Intermediate accounting.
Lee, N., & Hales, E. (2003). Accounting. Toronto: Prentice Hall.
Penning, A. (2012). Budgeting. Osborne.
Scheffé, H. (2010). The analysis of variance. New York: Wiley-Interscience Publication.
Searle, S., Casella, G., & McCulloch, C. (2009). Variance Components. Hoboken: John
Wiley & Sons, Inc.

ACCOUNTING 13