Responsibilities of Company Directors

The assignment highlights the key responsibilities of company directors, including management of the business, promoting success, and acting honestly. It also covers the power of directors to delegate tasks to committees or managing directors, and the responsibility for ensuring compliance with regulatory requirements such as registered office and notifying ASIC. The assignment provides a summary of the director's duties and responsibilities in line with corporate governance principles.

MANAGING FINANCE

TABLE OF CONTENTS
1. Identifying the current statutory requirements for tax compliance and extract current tax
liabilities under taxation legislation............................................................................................1
2. Identifying current compliance requirements under Corporations Act 2001..........................2
3. Explaining application of principles of accounting to develop budget...................................2
4. Listing critical date and initiatives need to generate resources in next financial cycle..........3
5. Listing item recommended for inclusion in budget................................................................3
6. Listing new or modified internal control could improve risk management by maintenance
of audit trails...............................................................................................................................3
7. Explaining and discussing implications or probity while preparing and revising budgets.....4
8. Summarising information to complete budget........................................................................4
9. Respond to questions presents through CEO..........................................................................5
10. State reporting requirements of ASIC and ATO...................................................................5
11. Listing company director’s legal duties and responsibilities................................................6
REFERENCES................................................................................................................................7

1. Identifying the current statutory requirements for tax compliance and extract current tax
liabilities under taxation legislation
The current statutory requirement of compliance of taxation are stated below:
 The procedure of centralized compliance with an inbuilt provider of service.
 Management could lay special emphasis on core business along with growth platforms
 Decreasing risk and improvement in level of efficiency
 Enhanced visibility along with control over procedure
List of current tax liabilities under taxation legislation are
 Sales tax to be paid
 Accrued income and tax of franchise that is payable
 Customer deposits and unearned revenue
 Current bills such as rent, insurance, utilities on monthly basis.
 Employer provided health insurance payable
 Employee state income tax withheld (Payne & Raiborn, 2018).
Extraction of methods of tax liability under taxation legislation
 Asset liability method: This is the main technique acknowledged through GAAP and as
measure of salary expense is dependent upon rate of assessment expected and assessed in
actual and amid that specific period in which it creates shift directly contrasts to reverse.
This is an accounting report that has arranged methodology and stresses flexibility of
money on basis of articulating to assess monetary position along with foreseeing future
money streams.
 Treatment of deferred tax liability: In particular event, or obligation is after effect to plan
on alignment which is relied to turn around and is best delegated an advantage or risk. It
might on off chance which is not anticipated and turn around later with best qualified as
value (Adams, Freedman & Prassl, 2018)..
 Deferred method: The measure of concede expense in pay is dependent on rate of
assessment as outcome which initiates with contrast. It is replicated as articulation of
wage arranged methodology. Moreover, it stresses legitimate as coordinating with cost
of income in duration with initiative of transitory distinction. Thus, it is not satisfactory
under GAAP.
1

2. Identifying current compliance requirements under Corporations Act 2001
The current compliance requirements and liabilities of business underlies in two categories
such as external and internal which are stated below:
 It is not essential for LLC and recommended to keep up redesigned working declaration,
issuance of enrolment offers, tracing investment premium trades and hold annual get
together of people moreover to executives and LLC is chief regulated.
 The associations have strictest inner requirements which comprises issuance of holding
starting and annually official and shareholders social events, getting and updated nearby
laws, recording every stock trade and issuing stock to shareholders (Newman, Charity &
Ongayi, 2018).
 Multiple business visionaries implies consistence units to orchestrate records and it
consolidates things such as test neighbourhood laws or affirmation of working,
confirmation of stock or cooperation interest along with trade record, a LLC seal or
cooperate and test minutes of meetings.
External requirements
 On basis of annual reports, most of states are in need of LLCs or associations to traces
annual report which grants to state track surrounded or qualified organizations and LLCs
as well.
 The yearly clarification along with charges of foundation which addresses ceaseless
requirements and scrutinise necessities prior joining business could organise monetary
arrangement in like mode.
 The cost paid to particular state for advantage to act association of LLC in particular
state.
3. Explaining application of principles of accounting to develop budget
Accounting or time periods: Age and day rule is mode to choose that business which must report
money related activities to delay the result of activities over standard age and day which is
generally monthly, consistent or even quarterly aspect. In case the term of every reporting period
is set up, application of GAAP or IFRS for tracing trades inside every duration. Further, one
ought to join header if budgetary enunciation the age and day secured through declaration. In
simple words, time period is applied to form budget with application of assumption of
2

accounting that a going concern aspect could be divided through shorter period of weeks,
quarters and months with objective of reporting and budgeting.
Matching principle: It is important guideline in accounts as planning standard aids to
association for reporting expense on its decree of pay at allotment of similar time related to
wages. With context to plot standard, there is requirement of acknowledging arrangements of
association with specialists with acquiring commission of 10%. Further, organizing standard is
linked by gathering technique to adjust and account entries. With absence of planning principle,
association might report $6000 on $60000 as commission payable. It is used to prepare budget
by ensuring that revenues for period are matched with incurred expenses in earning revenue for
period are matched with expenses incurred in earning that revenue for duration (Smith & et.al.
2018)..
Account groups: It is used to prepare budget through segregating the expense and revenue
accounts into budgets of profits and asset, equity along with liability which accounts into the
capital budgets such as capital expenditure and cash flow.
4. Listing critical date and initiatives need to generate resources in next financial cycle
 Loan of $100000 on 31st December 2020.
 Raise in advertisement budget by $10000 over 2018/19 results
 Increment in salaries and wages by $105000 over 2018/19
 Decreasing gross profit rate by 1%
 New car for chairman which would impose luxury car tax
 Completing debtor analysis to reduce cash tied up in outstanding debts
5. Listing item recommended for inclusion in budget
 Transportation
 Water bill
 Amenities of staff
 Store supplies as it was previously included with cleaning expenses
6. Listing new internal control can lead to improve in risk management by maintenance of audit
trails
The modified internal control which leads to improve risk management for organization are”
 Following rules and regulations
 Application and implementation of all procedures
3

 Time sheets along with operating hours must be noted
The risk management area considers internal control up gradation and modifications such as:
 Discount need to be traced
 Appropriate authorisations
 Cash registers reconciliation.
 Maintenance of currency of asset register
 Open line communication
 Descriptions of jobs
Audit trails include
 List of directives as all cash retained received on form of pre numbers, payments through
cheque with completed stub
 Paper work with every details
 Secondary control as cash receipt would have secondary monitoring system
7. Explaining and discussing implications or probity while preparing and revising budgets
 The repercussions of genuineness during correcting and preparing to spend arrangements
related to respectability.
 It directly incorporates protecting about full accountabilities with advantages thar
organization repaying small need that it is related to trade or not. (Brady & Stagliano,
2018).
 This is moreover very basic that every piece of honest to goodness attain correspondingly
as cash with context of concerned commitment.
8. Summarising information to complete budget
Every information would be related to stated duration and must reflect four quarterly
periods. Every budget like sales, profit, GST cash flow, debtors ageing summary should be in
particular format described by organization’s policy and procedure. The reason behind increment
in customer base and business built on superior after sale service.
 Overall sales for 2019/20 target set through business plan must be apportioned across
quarter in similar percentage gained in 2018/19.
 Gross profit decrease by 1%.
 Accounting fee negotiated for fixed amount of $100000 and paid equal amount every
quarter.
4

 Bank charges equal amount.
 Advertising, insurance, repairs and maintenance and rent apportioned every quarter.
 Statutory requirements comprises:
 Superannuation: 9.5% of wages and salaries
 Payroll tax: 2.42% of wages and salaries
 Workers compensation: 2% of wages and salaries
 Compensation tax is 27% of net profit
9. Questions respond presents through CEO
On basis of sales budget forecast, it is replicated as gross profit of 43% which is 1%
decrease from previous year. Further, with context of profit budget, it increases with 7.11%
which is positive signal. Apart from this, GST cash flow analysis, it was highest in quarter 3 and
minimum in quarter 4.
10. State reporting requirements of ASIC and ATO
ASIC
The Australian Securities And Investments Commission regulates compliance through financial
reporting and requirements for entities subject to the corporations Act and gives relief from
requirements in specific circumstances. The active monitoring of entities compliance with these
requirements contributes to market integrity and confidence of investor.
This exempts a responsible entity from s1016A(2)(a), with context to Corporate
regulations 2001, to the extent that eligible application form for subscribing for an interest in
scheme should consider date of birth, offered that application form reflect person must be of at
least 18 years of age.
 Displaying company name wherever business is operated
 Inclusion of CAN or ABN on every document
5

 Keeping all therecords of members and meetings to be held
 Checking annual statement each year
ATO
The Australian taxation office is in need of businesses for submitting business activity statement
on monthly, annually and quarterly. Generally, this is used to report and pay goods along with
service tax and instalments as pay as you go and PAYG withholding tax and obligations of other
tax.
11. Listing legal duties and responsibilities of company's director
Legal duties and responsibilities of company’s director are stated below:
They are responsible for purpose of management of company as they should act honestly and
promote success of business and advantage to its shareholders. They also have presence of
responsibilities to employees of company along with trading partners and state. In the similar
aspect, they are responsible with context of internal governance of organization. The power of
director is given to them on collective basis as board and as whole. They also have collective
responsibility for managing company (Baker, 2018).
The most import responsibility is delegation of tasks as constitution might authorise
directors for delegating exercise of powers to committee comprises one or more directors, ot to
managing director along with executive director. On the contrary, it does not absolve directors of
responsibility for company’s management (Roles and responsibilities of director, 2019).
The secretary of company attains responsibility to ensure that organization comply with
certain requirements with context to Corporation act, like requirements have registered office
and to notifying certain details of ASIC. In case, proprietary company with absence of secretary
every director is rather responsible for contravention of these requirements, until director took
numerous reasonable steps for ensuring compliance of company.
6

REFERENCES
Books and Journals
Adams, A., Freedman, J., & Prassl, J. (2018). Rethinking Legal Taxonomies for the Gig
Economy: Tax Law, Employment Law, and Economic Incentives.
Baker, C. R. (2018). The lack of impact of fair value accounting: a commentary on ‘“fair value”
accounting as the normative Fisherian phase of accounting’. Accounting History
Review, 28(3), 191-198.
Brady, W. J., & Stagliano, A. J. (2018). Discretionary Accounting Principles Application: Some
New Empirical Evidence from a Cross-Country Study. Proceedings of the Northeast
Business & Economics Association.
Newman, W., Charity, M., & Ongayi, W. (2018). Literature Review on the Impact of Tax
Knowledge on Tax Compliance among Small Medium Enterprises in a Developing
Country. International Journal of Entrepreneurship.
Payne, D. M., & Raiborn, C. A. (2018). Aggressive tax avoidance: A conundrum for
stakeholders, governments, and morality. Journal of Business Ethics, 147(3), 469-487.
Smith, D & et.al. (2018). Manganese testing under a clean air act test rule and the application of
resultant data in risk assessments. Neurotoxicology, 64, 177-184.
Online
Roles and responsibilities of director. 2019. [Online]. Available through
<https://www.icaew.com/en/technical/business-resources/legal-regulatory-tax-
governance/directors-duties/the-icaew-guide-to-the-duties-and-responsibilities-of-
directors>.
7