Advance Diploma of Leadership BSBFIN601 Financial Report Analysis

This report serves to analyze variances between actual and budgeted financial data, focusing on the implementation of budgets. It explores the principles of financial probity, including accountability, transparency, impartiality, and confidentiality, crucial for sound financial management. The report also outlines four key accounting principles: conservatism, materiality, full disclosure, and consistency. It then delves into relevant international and local legislation, such as AASB 107, Australian Accounting Standards, and the Income Tax Act, emphasizing their importance in financial operations. Furthermore, the report defines essential financial terms like GST, company tax, PAYG, ABN, and superannuation, providing a comprehensive overview of financial concepts. The report references key sources such as the Department of Finance and AccountingCoach, providing students with a solid understanding of financial probity, accounting principles, and relevant legislation.

ADVANCE DIPLOMA OF LEADERSHIP 1
Student declaration:
To be filled out and submitted with responses
 I declare that this task is all my own work and I have not cheated or plagiarised the
work or colluded with any other student(s)
 I understand that if I am found to have plagiarised, cheated or colluded, action will be
taken according to process explained to me
 I have correctly referenced all resources and reference texts throughout these
assessment tasks
 I understand the rights to re-assessment
 I understand the right to appeal the decisions made in the assessment

ADVANCE DIPLOMA OF LEADERSHIP 2
Contents
Purpose of the report:.................................................................................................................3
Task 1:........................................................................................................................................3
Financial probity:....................................................................................................................3
4 principles of accounting and financial systems:..................................................................3
International and local legislation:.........................................................................................4
Fringe benefit tax return:........................................................................................................4
Describing following terms:...................................................................................................5
References:................................................................................................................................6

ADVANCE DIPLOMA OF LEADERSHIP 3
Purpose of the report:
The main purpose of this report is to analyse the variances between the actual and the budget
data and figures, implement the budgets. Further, this report talks about the various rules and
regulations that each company has to follow and meet when it comes to conducting the
business operations.
Task 1:
Financial probity:
The following are its requirements:
Accountability: it must be capable of being explaining the way the tasks are to be done and
the reasons of the choices that have been made along with the money that has been spent
on the same. This would include the proper documentation that would leave a trail of audit.
Transparency: this would help in the minimisation of the opportunity of any sort of risk,
fraud or corruption
Impartiality: the management of the individuals, recruitment and the other organisations
should be frank, unbiased and fair
Confidentiality: the privacy and confidentiality of any product or the matter should be
maintained without fail ("Ethics and Probity in Procurement | Department of Finance",
2019).
4 principles of accounting and financial systems:
The following are the accounting principles:
Conservatism, in which when there are amounts available for one transaction, then the
lower shall be recorded in the books. Plus, the profits would never be overestimated
and there shall always be a provision for losses
Materiality, in which the amounts that are material for the business operations or that
are relevant to the business would be recorded in the books of accounts, thereby
eliminating the insignificant information
Full disclosure, in which all of the facts and figures would be reported in the books of
accounts that are important for the business operations. There shall be a full disclosure

ADVANCE DIPLOMA OF LEADERSHIP 4
of all of the transactions and events taken place during the year. There shall be a
recording of all relevant facts in the books of accounts
Consistency, the same accounting policies shall be followed for the purposes of
preparing the books of accounts for each year, with an exception when the same is
desired by law, it would help in better representation of the facts of the business
operations ("Accounting Principles | Explanation | AccountingCoach", 2019).
International and local legislation:
 The financial policy and the procedures manual of the company lays down the rues
and the legislations that are to be followed by the staff of the company
 It is bound to follow the rules of AASB 107, statement of cash flows which lays down
the recording and reporting of the cash inflows and the cash outflows of the company
during the year
 AASB which is Australian Accounting Standards board, that lays down the
accounting standards which are to be followed by each private or the public company
 The Income Tax Act, which contains the rules regarding the taxability of the income
earned by the company etc
Describing following terms:
GST: this is the goods and services tax which is levied on the goods that have been produced
and the services that have been rendered by the company. This tax is a form of the indirect
taxes. The rate is currently 10%.
Company tax: this is the amount of the tax which are levied on the earnings that the
company has earned during the normal course of the business transactions of the company. In
the given case study, it is 30%.

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PAYG: pay as you go are the taxes that are deducted from the incomes when they are paid to
the employees of the company or to any other person. This is the amount which is deducted
from the incomes and then deposited into the government account.
ABN: this is the Australian Business Number which is a unique number issued by Australian
Business Register which is operated by the ATO. This is the requirement of each business
which operates in the country of Australia.
Superannuation: these are the schemes of the government of Australia wherein the
arrangements are made by the government so that the citizens of the country have enough
money in the form of pension when they retire.
References:
Accounting Principles | Explanation | AccountingCoach. (2019). Retrieved 9 October 2019,
from https://www.accountingcoach.com/accounting-principles/explanation
Activity statements. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Activity-statements/
Ethics and Probity in Procurement | Department of Finance. (2019). Retrieved 9 October
2019, from https://www.finance.gov.au/procurement/procurement-policy-and-
guidance/buying/accountability-and-transparency/ethics-and-probity/principles.html
Fringe benefits tax return. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Fringe-benefits-tax-return/

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Goods and services tax. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Goods-and-services-tax/
Income tax. (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Income-tax/
Pay as you go (withholding and instalments). (2019). Retrieved 9 October 2019, from
https://www.ato.gov.au/Business/Reports-and-returns/Due-dates-for-lodging-and-
paying/Due-dates-by-topic/Pay-as-you-go-(withholding-and-instalments)/