Report on Financial Activity

Summative Assessments 1

Question 1
Why do employees need to understand legislative requirements? Include legislation
applicable to your role or intended career in your answer. You might need to conduct
additional research to fully answer this question. (100-120 words)

Employees need to understand legislative requirements because they are expected to

adhere to the relevant legislation and codes of practice, as well as internal organisational
codes and policies when they are performing their work. Areas such as confidentiality, duty
of care and conflict of interest should be covered by their organisation. In order to work to
their full capacity and at their highest efficiency, employees must understand legislative and
organisational requirements.

Legislative requirements for disability workers:

The Disability Standards for Education (The Standards) cover enrolment, participation,
curriculum development, student support services and the elimination of harassment and
victimisation, and provides guidance for schools on:
- The rights of students with disability
- The legal obligations on education providers
- Some of the measures that would demonstrate compliance.

The Standards apply to all students with disability, not just those who are eligible for
support under targeted funding programs. Additional resources provided to schools do not
define or limit the support provided for student disabilities.

Question 2
What is a cash flow budget and explain its role in forecasting. (50-80 words)

Cash flow is the movement of money in and out of an organisation. Cash flow is not the
same as profit. It is possible to show a profit at the end of a financial year yet experience
times during the year when cash flow is insufficient to meet current expenses.

Those who analyse cash flow budgets/reports are able to determine how much cash the
organisation will have at specific periods of time during the year and whether or not steps
need to be taken to arrange additional finance and/or adjust organisational strategies.

Question 3
What is depreciation and how does it affect an organisation? (150-200 words)

The Australian Taxation Office (ATO) allows small businesses to use simplified depreciation
rules as an alternative method of calculating deductions for most depreciating assets.

In general, organisations can:

 - Immediately write off most depreciating assets costing less than $1,000 each (low-
cost assets)
- Pool in a general small business pool and deduct at the rate of 30% most other
depreciating assets with an effective life of less than 25 years, such as motor vehicles
and computers
- Pool in a long-life small business pool and deduct at the rate of 5% most depreciating
assets with an effective life of 25 years or more, such as wharves and cement silos
- Deduct most newly acquired assets at either 15% or 2.5% in the first year, regardless
of when they were acquired during that year

Question 4
What does BAS stand for? Explain how it is used in 50-80 words.

The Business Activity Statement (BAS) is used to calculate and report the organisation’s tax
obligations (what is owed) and claims (tax credits) to the Australian Taxation Office.

It is essential that you are familiar with the products/service your organisation offers and
which attracts GST. All registered businesses must submit GST returns (BAS) within 21 days
of the end of their reporting period which will be either quarterly or monthly.
The BAS input tax credits and the amount of GST which is owed will be offset against each
other. This means you will need to make a GST payment or receive a GST refund. The BAS
also includes a number of other regular tax payments which are offset against one another.

Question 5
What is an ABN, where would you use it and what are the repercussions of not using it? (50-
80 words)

An ABN is a unique 11-digit number that identifies your business to the government and
community. You can use an ABN to:
- Identify your business to others when ordering and invoicing
- Avoid pay as you go (PAYG) tax on payments on get
- Claim goods and services tax (GST) credits
- Claim energy grants credits
- Get an Australian domain name

If a supplier does not provide an ABN and the total payment for goods and services is more
than $75 (excluding GST) you generally withhold the top rate of tax from the payment and
pay it to the ATO. If a supplier has applied for an ABN you can offer to hold payment until
they have obtained and quoted their ABN.
Question 6
What is the place of ethical principles, behaviours and codes in the financial services
industry? (150-180 words)

Organisations and individuals across the financial services industry are working with the
human behaviour that is right or wrong, acceptable or not. All is based on morality, honesty,
truthfulness, integrity and more by each one of the parties. Following those code of ethic,
practice and behavioural is important. It will set out the general standards such as integrity,
competence and objectivity.

The codes of ethical principles in the financial industry are various and can be found in many
places, like government websites, in the APES 110 code, different state laws and many
more. Those codes can be resumed by five principles that are the most important in the
practice of financial work.

The worker needs to respect the fundamental principles of the code which are: be
competent, respect the integrity; transparency and confidentiality of the information they
are working with, and the worker needs to work with fairness and objectivity. They need to
act in the public interest as well.

Question 7
Describe the information which will be contained in typical financial reports. (80-100 words)

A typical financial report could include:

- A clear statement of purpose
- Methods of data collection and sources
- Details on how the information included in the report was collected
- Costing trends (wages, materials, overheads)
- Identification of any shifts in supplies and market
- A statement of how such shifts might impact product costs and sales revenue
- Contingency plans, suggestions or measures with possible options for sourcing other
supplies or markets
- Financial data and information in a suitable form
- A recommended distribution list for the report