Discuss about the Accounting for Australian Taxation Office.
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 (Scheffe?, 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.
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 (Scheffe?, 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.Standards among others. Therefore, there is a lot of effort and care when preparing reports for a company that is listed .
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.
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.
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).
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.
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.
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.
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.
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 company may learn more on how to enhance customer service and the after sale service that the customers offer.
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.
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.
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.
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 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.
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.
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 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.
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.
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 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.).
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).
References
Bielefeld, B., & Schneider, R. (2014). Budgeting. Basel: Birkha?user.
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.
Scheffe?, 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.
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