FNSACC506: Implement and Maintain Internal Control Procedures Solution

This assignment solution addresses the FNSACC506 unit, focusing on implementing and maintaining internal control procedures. It covers topics such as the Privacy Act 1988, ethical responsibilities of accountants, the role of ASIC, and key legislation like the Corporations Act 2001. The document analyzes the importance of internal control systems, corporate governance principles, and the limitations of internal controls. It includes answers to assessment tasks, an email summarizing corporate governance principles of BHP Billiton Limited, and discusses elements of internal controls, risk assessment, and the evolution of internal controls. The solution emphasizes the significance of separating duties, access controls, auditing documents, and reconciliations to ensure data integrity and compliance.

Running head: FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL
PROCEDURES
FNSACC506 Implement and Maintain Internal Control Procedures
Name of the Student:
Name of the University:
Authors Note:

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Contents
Assessment Task 1:..........................................................................................................................3
Answer 1:.....................................................................................................................................3
Answer 2:.....................................................................................................................................3
Answer 3:.....................................................................................................................................3
Answer 4:.....................................................................................................................................4
Answer 5:.....................................................................................................................................4
Answer 6:.....................................................................................................................................4
Answer 7:.....................................................................................................................................5
Answer 8:.....................................................................................................................................5
Answer 9:.....................................................................................................................................5
Answer 10:...................................................................................................................................6
Answer 11:...................................................................................................................................6
Answer 12:...................................................................................................................................7
Answer 13:...................................................................................................................................7
Answer 14:...................................................................................................................................7
Answer 15:...................................................................................................................................8
Answer 16:...................................................................................................................................8
Answer 17:...................................................................................................................................8

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Answer 18:...................................................................................................................................8
Answer 19:...................................................................................................................................9
Answer 20:...................................................................................................................................9
Assessment task 2:...........................................................................................................................9
Assessment task 3:.........................................................................................................................11
Assessment task 4:.........................................................................................................................13
References:....................................................................................................................................15

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Assessment Task 1:
Answer 1:
As per the Privacy Act 1988 the files and records handled during the course of providing services
to the clients must be maintained properly. Access to these files and records should be restricted
only to the concerned person. No information or records from such files should be disclosed to
anyone except with the consent of the client. Business organizations as well as individuals must
follow the provisions of Privacy Act 1988 to comply with the requirements of the act.
Answer 2:
A company’s files must be properly kept in a place and system which is restricted to the access
of unauthorized personnel. The data integrity and confidentiality about the information of the
company is of utmost importance for an organization. The confidentiality and security of
company files can be improved significantly with the use important provisions of the Privacy Act
1988. It important for the professionals including the qualified accountants and other
professionals to adhere to the requirements of the Privacy Act 1988 to protect the company files
and documents properly (Alles, Brennan, Kogan & Vasarhelyi, 2018).
Answer 3:
Integrity and honesty: Accountants must have integrity and honesty. Integrity an honestly will
help the accountant to correct record the financial transactions in the books of accounts. These
two ethical responsibilities of an accountant will help the profession to grow further and improve
the quality of book keeping and financial reporting.

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Answer 4:
The confidentiality of the data has been breached and the colleague has violated the work ethics
and standards at the work place. Complying with the professional and work place standards is
essential for workers and employees. The Privacy Act 1988 protects the privacy and
confidentiality of personal and sensitive information of workers and employees at the work and
other places. In case colleagues at work place violate the ethical provision of confidentiality and
privacy requirements of personal information the workers violating such provision will be liable
to penalties for their unethical behavior (Chan & Vasarhelyi, 2018).
Answer 5:
Australian Securities and Investments Commission (ASIC) is the corporate regulator in the
country with the responsibility of enforcing and regulating laws in relation to corporate and
financial services. ASIC is responsible to regulate the securities market to protect the interests of
the investors and shareholders. The ASIC Act 2001 has also been formulated to protect the
interests of investors and shareholders in the capital market.
Answer 6:
I. ASIC act 2001.
II. Corporations Act 2001.
III. Protection of Consumers and Investors Act.
The purpose of ASIC act 2001 is to provide the laws and regulations for company and financial
services in the country. Corporations Act 2001 is responsible to provide necessary rules and
regulations applicable to companies in the country and Protection of Consumers and Investors
Act is ot protect the investors and consumers from fraud.

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Answer 7:
I. Taking important business decisions: The directors have the fiduciary duty to take important
business decisions to manage the business operations of companies.
II. Calling meeting of Board of directors to discuss important meeting: The board of directors
have the duty to calling necessary board meeting to discuss about the business operations and
take important business related decisions to manage the business operations effectively.
III. Maintaining books of accounts and keeping other records of the company: A company
requires to maintain proper books of accounts and other records. The books of accounts must
be prepared in accordance with the applicable accounting standards applicable for companies
in the county. The directors is liable to ensure that the company is maintaining appropriate
books of accounts as per the provisions of Corporations Act 2001 and Accounting standards
issued by the Australian Accounting Standards Board.
IV. Preparation and filing statutory documents: Apart from books of accounts, other necessary
records shall be maintained and statutory documents shall be filed by the directors with
appropriate authorizes on or before due date in correct form (Center, Alliance & Insurance,
2016).
Answer 8:
I. The basic rules of GST.
II. The GST free goods and services.
III. GST inclusive goods and services.
Answer 9:
Using common reporting standards as used by residents to prepare and present financial reports
by the foreign residents. The foreign tax residents have become liable to file the mandatory tax

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
returns as per the Common Reporting Standard. As a result the uniformity in financial reporting
between residents and foreign residents has increased (Argyris, 2017).
Answer 10:
The Global Reporting Initiative (GRI) is to unify the financial reporting standards to improve
comparability of financial reports of different companies operating in different parts of the globe.
One set of financial reporting standards to prepare and present financial reports is the main
objective of GRI.
A single set of reporting standards referred as GRI will effectively reduce number of negative
aspects of financial reporting. The comparability of financial and accounting reports shall be
improved with use of single sets of accounting and financial reporting standards. The quality of
financial reporting will improved significantly with the use of GRI.
Answer 11:
An effective internal control system is essential to the successful operations and management of
an organization. Effective internal control system helps in managing the resources of an
organization effectively as well as other assets of the organization are correctly used in the
business operations. The risk of loss due to fraud and errors by the management also reduces
with an effective internal control system in place. Effective internal control systems ensure that
each and every single transaction is correctly documented and reported. The books of accounts
are maintained effectively due to effective internal control system within an organization as all
the financial transactions are correctly recorded as per the accounting standards in the books of
accounts (Alles, Brennan, Kogan & Vasarhelyi, 2018).

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Answer 12:
Corporate governance is about fair and standard practice of business operations whereas internal
auditing is appraisal of internal control system and management of the organization by internal
or external employees. Corporate governance improves significantly if an organization has an
effective internal control system as all the provisions of different acts are followed properly by
an organization with an effective internal control system in place.
Answer 13:
Internal controls cannot reduce the risk of mistake, error and fraud in an organization completely
to zero. The effectiveness of internal controls is dependent on the efficient working of these
controls throughout the entire period of reliance. The inherent risk of errors, mistakes cannot be
reduced even with formulation and implementation of effective controls. The element of human
error cannot be eliminated and since the internal control system within an organization is to be
implemented by human agency thus, internal control system will never be free of inherent risk
(Chang, 2016).
Answer 14:
I. Increased risk of fraud and error in preparation and presentation of financial statements:
Inadequate internal controls will increase the risk of fraud in preparation and presentation of
financial statements. The internal controls ensure that all transactions are correctly traced and
recorded in the books of accounts thus, inadequate internal control would increase the risk of
error in financial statements.
II. Unable to provide protection from inherent limitations: The inherent limitations of financial
information to portray the true and fair picture of an organization in the financial statements

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
as the inadequate internal controls will not consider the appropriate accounting procedures
and policies relevant for the organization.
III. Inability to protect the assets including fixed assets of an organization: The internal controls
safeguard the assets of an organization. Inadequate internal controls will not be able to
safeguard the assets of an organization (Scott, 2015).
Answer 15:
At-least after four years the CEO may take on the role of a chair.
Answer 16:
The crater must contain all provisions to be fulfiller by different stakeholders of an organization.
The relevant provisions and guidelines provided in the charter must be followed by the
employees of the organization.
Answer 17:
I. Risk assessment.
II. Control environment.
III. Control activities.
IV. Monitoring activities.
V. Information and communication.
Answer 18:
The steps in evolution of internal controls are as following:
I. Efficiency.
II. Effectiveness.
III. Operating throughout the period of reliance.

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Answer 19:
Internal audit is about verification of internal control and securities within an organization.
External audit on the other hand is about independent verification of financial statements of an
organization by qualified auditors (Sayles, 2017).
Answer 20:
I. Separating duties: The duties of employees and workers shall be properly segregated to make
clear line of responsibilities of employees and workers within an organization. Segregation of
duties shall help the organization to fix responsibility of employees and workers for different
duties.
II. Access controls: Access controls is important to the internal control procedures in accounting
as it effects integrity and confidentiality of data.
III. Auditing physical document: The physical document must be maintained and kept properly
for future verification.
IV. Documentation checking: The document shall be checked properly to verify whether the
standard procedures have been followed.
V. Verification of account balances: Accounts balances shall be verified properly.
VI. Reconciliations: Reconciliation must be conducted periodically.
VII. Approval of authority: Approval of appropriate authority shall be taken to issue vouchers and
invoices. .
Assessment task 2:
Email:
To,
The Assessor.

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
Subject: Summary of corporate governance principles of BHP Billiton Limited
Respected sir,
BHP Billiton Limited is an Anglo-Australian mining company founded back in 1885 in
the country. The company is dual listed company with its shares listed in Australian Stock
Exchange and London Stock Exchange.
Company is a multi-national company with its operations spreading to number of countries
including Australia, USA, UK, Russia and others. The company complies with corporate
governance principles of ASX of maintaining proper books of accounts, conduct business
operations as per the provisions of Corporations Act 2001, fulfil the requirements of the society
to make optimum use of resources to achieve organizational objectives and correctly paying its
taxes as per the Income Tax Assessment Act 1997 (Goetsch & Davis, 2014).
The internal control and governance system of the company:
As already mentioned that the ability of an organization to efficiently use its resources in
business operations is dependant to a large extent on the effectiveness of its internal control
system and governance structure of the company.
The management of BHP Billiton Limited has instituted an effective internal control system
within the organization to safeguard the assets of the company and make effective use of
resources of the company in business operations. The company has constituted number of
different committees such as Audit committee, Remuneration committee and other such
committees to fulfil the requirements of Corporations Act 2001.
Audit committee:

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FNSACC506 IMPLEMENT AND MAINTAIN INTERNAL CONTROL PROCEDURES
The board of directors of the company has constituted an audit committee to conduct regular
verification of internal control systems, its effectiveness, internal controls, accounting system
and other systems operating within the company. The audit committee also cooperate with
internal and external auditors to improve the effectiveness of internal and external auditing.
The audit committee evaluates the effectiveness of different systems within the company to
identify the weaknesses in internal control system, internal securities and accounting system. The
recommendations if properly followed by the management of an organization improves the
effectiveness of business operations and ability of an organization to use its resources efficiently.
The management of BHP Billiton Limited has considered the recommendations of Audit
committee to improve the business operations of the company over the years (Scott, 2015).
The company must comply with the requirements of Corporations Act 2001, Income Tax
Assessment Act 1997, Australian Securities and Investment Commission Act 2001 to comply
with the legislative requirements in the country. Internal control system within the company
helps the company to achieve the above objectives.
Regards,
(Name of the student)
Assessment task 3:
Introduction:
Internal control system of an organization plays an important role in ensuring that the functions
and operations within the organization are in accordance with the objectives of the organization.