Report on financial activity

Write an additional 500 words into the attached LV2906 file based on the question’s requirements.

Assessment 1 – Coversheet
Students: Please fill out this cover sheet clearly and accurately. Make sure you have kept a
copy of your work.
Student and Submission Details
Student
Name
Unit Code
and Name
Student ID
Date
of
submission
BSBFIN401 Report on financial activity
STUDENT DECLARATION
I declare that
a.
b.
this assessment is my own work.
None of this work has been completed by any other person.
c.
I have not cheated or plagiarised the work or colluded with any other student/s.
d.
I have correctly referenced all resources and reference texts throughout these
assessment tasks.
e.
I understand that if I am found to be in breach of policy, disciplinary action may be
taken against me.
Student
Signature
Assessor To Complete
Assessment 1
Short Answer Questions
Assessment Result
Date
Type Of Submission
□ C (Competent)
☐ First submission
□ NYC (Not
Competent)
☐ First re-submission
Yet
□NA (Not Assessed)
☐
Second
submission
re-
Assessor feedback
BSBFIN401
9
Assessor Name
Assessor Signature
•
•
•
•
•
organisational policies, procedures and accounting
standards relating to preparation of financial reports
organisational financial data, including:
•
budget variances
budgets and forecasts
cash flow and profit reports
balance sheets
financial year reports
operating statements
expenditure and receipts
profit and loss statements
types of assets including property, plant and
equipment
comparative financial performance
financial discrepancies including:
•
•
•
BSBFIN401
Not Present
double-entry and accrual principles
provisions of relevant legislation, regulations, standards
and codes of practice relevant to financial operations,
taxable transactions and reporting requirements
components of organisational accounting systems
•
•
•
•
•
•
•
•
•
•
Unsatisfactory
Knowledge evidence
Satisfactory
This assessment meets the following Knowledge Evidence:
absence of auditable trail
expenditure report mismatches
incorrect payments and unreconciled cash flows
10
•
•
•
•
techniques used for financial forecasting and analysis
options, methods and practices for deductions,
benefits and depreciations
ethical requirements associated with preparing
financial reports for corporate entities, including
conflict of interest, confidentiality, and disclosure
requirements
industry-standard methods and formats used to
present financial data
Assessment 1 – Short Answer
Questions
 Assessment summary
☐ You are required to answer all the written questions in this assessment.
 Resources and equipment required to complete this assessment
o
o
Access to textbooks and other learning materials.
Access to a computer, printer, Internet and email software (if required).
☐
 When and where should the assessment be completed?
o
o
This assessment may be done in your own time as homework or you may
be given time to dothis task in class (where applicable).
Your assessor will provide you with the due date for this assessment.
☐
 What needs to be submitted?
o
☐
Your answers to each question in this assessment along with references.
 Instructions
o
o
o
This is an open book test – you can use your learning materials as reference.
You must answer all questions in this assessment correctly.
You must answer the questions by typing your answers in Microsoft Word
and converting it into a pdf.
o
Please include the following details in the header section of
each page of your assessment document:
☐
•
BSBFIN401
Student Name and ID
11
•
•
•
•
Course Code and title
Unit Code and title
Trainer and assessor name
Page numbers
☐
You are required to submit your assessment on the LMS
(Moodle). No submissions will be accepted via emails.
o
Short Answer Questions
Question 1
Describe the accounting principles in the table listed below:
Accounting Principle
Description of Accounting Principle
a. Double-entry accounting
b. Accrual principle of accounting
Question 2
Complete the table below:
a.
Identify at least one of each of the following items relevant to the financial activities
listed in the table below.
BSBFIN401
i.
Legislation
ii.
Regulations
12
iii.
Standards
iv.
Codes of Practice
b. For each identified item, outline at least one provision that applies to the
corresponding financial activity.
Financial Operations
Legislation
Relevant Provision
Identify the title of the legislation
Regulation
Relevant Provision
Identify the title of the regulation
Standard
Relevant Provision
Identify the title of the standard
Code of Practice
Relevant Provision
Identify the title of the code of practice
Taxable Transactions
Legislation
Relevant Provision
Identify the title of the legislation
BSBFIN401
13
Regulation
Relevant Provision
Identify the title of the regulation
Standard
Relevant Provision
Identify the title of the standard
Code of Practice
Relevant Provision
Identify the title of the code of practice
Financial Reporting Requirements
Legislation
Relevant Provision
Identify the title of the legislation
Regulation
Relevant Provision
Identify the title of the regulation
BSBFIN401
14
Standard
Relevant Provision
Identify the title of the standard
Code of Practice
Relevant Provision
Identify the title of the code of practice
Question 3
Describe the purpose of the components of organisational accounting systems listed in the
table below.
Component of Accounting System
Description of Purpose of Component
a. Journal Entries
b. Trial Balance
c.
BSBFIN401
Audit of Financial Statements
15
Question 4
Describe each of the techniques used for financial forecasting and analysis, respectively,
listed in the table below.
Technique
Description of Technique
a. Econometric modelling for financial
forecasting
b. Trend analysis method for financial
analysis
Question 5
Answer the questions below on accounting of deductions, benefits, and depreciation.
a. Describe each listed option that can be considered when accounting for each of the
listed financial concepts.
Financial Concept
Description of Option
Option
Deductions
Deductions
expenses
Benefits
Holiday pay
Asset Depreciation
Instant asset write-off
BSBFIN401
for
operating
16
b. Describe how each listed method can be used when accounting for each of the listed
financial concepts.
Financial Concept
How Method Is Used
Method
Deductions
Mixed business and private
expenses
Employee Benefits
Employer
superannuation
guarantee contributions
Asset Depreciation
Prime
cost
depreciation
c.
method
of
Describe at least one way each listed practice can be implemented when accounting
for each of the listed financial concepts.
Financial Concept
How Practice Can Be
Implemented
Practice
Deductions
Record keeping
Employee Benefits
Salary sacrifice arrangement
Asset Depreciation
Depreciation
assets (pool)
BSBFIN401
of
low-value
17
Question 6
Describe each of the listed ethical requirements associated with preparing financial reports
for corporate entities.
Ethical Requirement
Description of Requirement
a. Conflict of interest
b. Confidentiality
c. Disclosure requirements
Question 7
Review the Accounting Standard AASB 101 Presentation of Financial Statements, found at
the AASB website.
AASB Accounting Standards
https://aasb.gov.au/pronouncements/accounting-standards/
Complete the table below:
a.
Describe how each listed industry standard method can be used to present
financial data
b.
Describe how each listed industry-standard format can be used to present financial
data
Industry-Standard Method
BSBFIN401
Description of How It Can Be Used
18
i.
Accrual basis of presenting
financial statements
ii.
Going concern
Industry-Standard Format
i.
Minimum information to
be presented on the face
the Balance Sheet as per
clause 68 of the AASB 101
ii.
Minimum information to
be presented on the face
the Income Statement as
per clause 81 of the AASB
101
Description of How It Can Be Used
Question 8
Describe the organisational financial information provided by each financial concept listed
in the table listed below:
Financial Concept
Description of Financial Information
Provided by Each Financial Concept
a. Budget variances
b. Budgets
BSBFIN401
19
c. Forecasts
d. Cash flow reports
e. Profit reports
f.
Balance sheet reports
g. Financial year reports
h.
Operating statements
i.
Expenditure
j.
Receipts
k. Profit and loss statements
BSBFIN401
20
l.
Types of assets
m. Property, plant and equipment
n. Comparative
performance
financial
Question 9
Describe the financial discrepancies listed in the table listed below:
Financial Discrepancy
a.
Description of Financial Discrepancy
Absence of auditable trail
b. Expenditure report mismatches
c. Incorrect payments
d.
Unreconciled cash flows
What to submit:
BSBFIN401
21
•
Answers to all questions
•
References
BSBFIN401
22
Assessment 1 – Coversheet
Students: Please fill out this cover sheet clearly and accurately. Make sure you have kept a
copy of your work.
Student and Submission Details
Student
Name
Unit Code
and Name
Student ID
Date
of
submission
BSBFIN401 Report on financial activity
STUDENT DECLARATION
I declare that
a.
b.
this assessment is my own work.
None of this work has been completed by any other person.
c.
I have not cheated or plagiarised the work or colluded with any other student/s.
d.
I have correctly referenced all resources and reference texts throughout these
assessment tasks.
e.
I understand that if I am found to be in breach of policy, disciplinary action may be
taken against me.
Student
Signature
Assessor To Complete
Assessment 1
Short Answer Questions
Assessment Result
BSBFIN401
Type Of Submission
□ C (Competent)
☐ First submission
□ NYC (Not
Competent)
☐ First re-submission
Yet
□NA (Not Assessed)
Assessor feedback
Date
☐
Second
submission
re-
Assessor Name
Assessor Signature
•
•
•
•
•
double-entry and accrual principles
provisions of relevant legislation, regulations, standards
and codes of practice relevant to financial operations,
taxable transactions and reporting requirements
components of organisational accounting systems
organisational policies, procedures and accounting
standards relating to preparation of financial reports
organisational financial data, including:
•
•
•
•
•
•
•
•
•
•
•
financial discrepancies including:
•
•
•
BSBFIN401
budget variances
budgets and forecasts
cash flow and profit reports
balance sheets
financial year reports
operating statements
expenditure and receipts
profit and loss statements
types of assets including property, plant and
equipment
comparative financial performance
absence of auditable trail
expenditure report mismatches
incorrect payments and unreconciled cash flows
Not Present
Unsatisfactory
Knowledge evidence
Satisfactory
This assessment meets the following Knowledge Evidence:
•
•
•
•
techniques used for financial forecasting and analysis
options, methods and practices for deductions,
benefits and depreciations
ethical requirements associated with preparing
financial reports for corporate entities, including
conflict of interest, confidentiality, and disclosure
requirements
industry-standard methods and formats used to
present financial data
Assessment 1 – Short Answer
Questions
 Assessment summary
☐ You are required to answer all the written questions in this assessment.
 Resources and equipment required to complete this assessment
o
o
Access to textbooks and other learning materials.
Access to a computer, printer, Internet and email software (if required).
☐
 When and where should the assessment be completed?
o
o
This assessment may be done in your own time as homework or you may
be given time to dothis task in class (where applicable).
Your assessor will provide you with the due date for this assessment.
☐
 What needs to be submitted?
o
☐
Your answers to each question in this assessment along with references.
 Instructions
o
o
o
This is an open book test – you can use your learning materials as reference.
You must answer all questions in this assessment correctly.
You must answer the questions by typing your answers in Microsoft Word
and converting it into a pdf.
o
Please include the following details in the header section of
each page of your assessment document:
☐
•
BSBFIN401
Student Name and ID
•
•
•
•
Course Code and title
Unit Code and title
Trainer and assessor name
Page numbers
☐
o
You are required to submit your assessment on the LMS
(Moodle). No submissions will be accepted via emails.
Short Answer Questions
Question 1
Describe the accounting principles in the table listed below:
Accounting Principle
a. Double-entry accounting
b. Accrual principle of accounting
Description of Accounting Principle
Double entry accounting is a system in which each
financial transaction is recorded with a debit and credit
entry, ensuring that the accounting equation is balanced
(assets = liabilities + equity) and maintaining accuracy in
the financial records (Im et al., 2018).
The accrual principle requires the recognition of revenues
and expenses, regardless of the timing of currency, which
provides a more accurate indication of a company’s
financial position and position compared to a cash basis
accounting where transactions are only recorded when
cash is received or paid (Im et al., 2018).
Question 2
Complete the table below:
f at least one of each of the following items relevant to the financial activities
listed in the table below.
Legislation
Regulations
BSBFIN401
iii.
Standards
iv.
Codes of Practice
b. For each identified item, outline at least one provision that applies to the
corresponding financial activity.
Financial Operations
Legislation
Relevant Provision
Identify the title of the legislation
Companies Act 2001
One relevant provision relates to financial reporting
requirements. Section 292 of the Companies Act 2001 sets
out financial reporting requirements, including the
financial statements to be prepared and audited by
companies (Scott, 2020).
Regulation
Relevant Provision
Identify the title of the regulation
The Australian Securities and Investment Commission
(ASIC) Regulations
This law contains provisions relating to various financial
activities, such as reporting requirements, licensing and
disclosure obligations for financial service providers
(Scott, 2020).
Standard
Relevant Provision
Identify the title of the standard
Australian Accounting Standards
his standard issued by the Australian Accounting
Standards Board (AASB) provides detailed guidance on
financial reporting and accounting practices in Australia
e.g., AASB 101 prescribes the presentation of financial
statements (Scott, 2020).
Code of Practice
Relevant Provision
Identify the title of the code of practice
Banking Code of Conduct
The Banking Act contains provisions on ethics,
responsible lending, insolvency recovery, and other
ethical standards that Australian banks are expected to
follow in their investment activities in (Scott, 2020).
Taxable Transactions
Legislation
Identify the title of the legislation
BSBFIN401
Relevant Provision
Income Tax Assessment Act 1997
Section 6-5 – This section explains the concept of
assessable income, which is important for the tax liability
of individuals and entities in Australia (Scott, 2020).
Regulation
Relevant Provision
Identify the title of the regulation
Taxation Administration Regulations 2017
Standard
This rule applies to reporting requirements and deadlines
for various tax-related transactions such as filing tax
returns and paying taxes (Scott, 2020).
Relevant Provision
Identify the title of the standard
Australian Accounting Standard AASB 112 – Income
Taxes
Code of Practice
This standard provides guidance on the calculation of
taxable income, including the recognition and
measurement of current and deferred taxes and liabilities
(Scott, 2020).
Relevant Provision
Identify the title of the code of practice
Tax Practitioners Board Code of Professional Conduct
Item 6 of the Act – This provision sets out the
requirements for registered tax professionals in Australia
to comply with tax laws and regulations to maintain the
confidentiality of client information (Scott, 2020).
Financial Reporting Requirements
Legislation
Relevant Provision
Identify the title of the legislation
Corporations Act 2001
Regulation
Section 292 – Annual Financial Statements. This section
outlines the requirements for certain entities to prepare
and present annual financial statements, including balance
sheets, income statements, and statements of cash flows,
in accordance with accounting standards (Scott, 2020).
Relevant Provision
Identify the title of the regulation
Australian Securities and Investments Commission
(ASIC) Corporations (Financial Reporting) Regulations
2002
BSBFIN401
Rule 4 – Nature and content of financial statements. This
Regulation sets out specific requirements for the content
and presentation of financial statements to be filed with
ASIC in accordance with the Companies Act (Scott,
2020).
Standard
Relevant Provision
Identify the title of the standard
Australian Accounting Standards (AASB 101 Presentation of Financial Statements)
Code of Practice
AASB 101 sets out the requirements for presenting
financial statements, including balance sheets, income
statements, and statements of cash flows. It also specifies
how accounting policies and material events should be
disclosed after the reporting period (Scott, 2020).
Relevant Provision
Identify the title of the code of practice
ASX Corporate Governance Council’s Principles and
Recommendations
Principle 4 – Protection of Integrity in Financial
Reporting. This principle emphasizes the importance of
establishing and maintaining robust risk management and
internal control systems to ensure the integrity of financial
reporting Provides guidance on audit committees,
independent audits and risk functionality (Scott, 2020).
Question 3
Describe the purpose of the components of organisational accounting systems listed in the
table below.
Component of Accounting System
a. Journal Entries
b. Trial Balance
c.
Audit of Financial Statements
Description of Purpose of Component
Journal entries serve to systematically record financial
transactions, providing important information such as
dates, related accounts and transaction details. They are
foundational records that ensure accurate financial
reporting and control accounting procedures (Raewf &
Jasim, 2020).
The trial balance summarizes all account balances for a
specified period of time to ensure equality of debits and
credits, and helps detect any errors or discrepancies in the
accounting records (Raewf & Jasim, 2020).
Auditing provides an independent review of an
organization’s financial records to verify accuracy,
identify misrepresentations or fraud, and assure
stakeholders of financial reliability on the issues (Raewf
& Jasim, 2020).
Question 4
Describe each of the techniques used for financial forecasting and analysis, respectively,
listed in the table below.
Technique
Description of Technique
a. Econometric modelling for financial
forecasting
b. Trend analysis method for financial
analysis
Econometric modeling combines statistical methods and
economic theory to predict future economic growth in
Australia. Researchers use historical data and economic
indicators to develop models that consider the
relationships among variables such as GDP growth,
inflation, and interest rates (Barra et al., 2020). These
models help in budgeting, investing strategies, and risk
decisions.
Trend analysis involves the study of historical economic
data in Australia to identify patterns and changes in key
metrics over time, such as revenues and profits. This study
informs strategic planning and decision-making in the
Australian business context (Barra et al., 2020).
Question 5
Answer the questions below on accounting of deductions, benefits, and depreciation.
a. Describe each listed option that can be considered when accounting for each of the listed financial
concepts.
Financial
Concept
Deductions
Op
tio
n
Deductions
for
operating
Description of Option
Australian businesses can count on deductions by writing off and claiming
business expenses such as rent and salaries to reduce taxable income,
ultimately reducing their income tax liability Proper accounting ensures
that they comply with Australian tax laws (Hajiyev, 2021).
expenses
Benefits
Asset Depreciation
Holiday pay
Instant asset write-off
In Australia, holiday pay refers to additional compensation paid to
employees as a result of working on public holidays or taking annual
leave. Employers must accurately calculate and record holiday pay to
comply with employment law (Hajiyev, 2021).
Immediate asset write-off is a tax-reduction technique that allows
businesses to deduct the cost of qualifying assets immediately in the year
of purchase, provide income benefits, and reduce taxable income
Accounting appropriately ensure that businesses take advantage of these
tax incentives, and comply with and carry out ATO guidelines (Hajiyev,
2021).
b. Describe how each listed method can be used when accounting for each of the listed financial
concepts.
Financial
Concept
Deductions
Employee Benefits
Asset Depreciation
c.
Mixed business and
private expenses
The most common approach when calculating mixed
business and personal expenses as discounts in Australia is
to make a detailed list of all expenses and then allocate them
to business based on the amount of business expenses
(Hajiyev, 2021).
In order to calculate employer superannuation guarantee
contributions as part of employee benefits, the method
Employer
records employer contributions to employees’
superannuat superannuation funds and these contributions are generally
ion guarantee contributions calculated as a percentage of employees’ salaries. Proper
accounting of these contributions allows employers to meet
their legal obligations under Australian law and also helps
employees plan for their retirement (Hajiyev, 2021).
In Australia, entities allocate costs equally over the useful
period of capital asset for declines in asset value using the
Prime
cost
method
o principal method. This approach is intended to spread the
f depreciation
cost of acquiring an asset over time, in line with the
expected decline in the value of the asset (Hajiyev, 2021). It
ensures that the financial statements reflect the value of
assets and the corresponding annual depreciation expense,
which can be used for tax and financial reporting purposes.
Describe at least one way each listed practice can be implemented when accounting for each of
the listed financial concepts.
Financial
Concept
How Practice Can Be Implemented
Practi
ce
Deductions
Record keeping
Employee Benefits
Salary sacrifice arrangement
Asset Depreciation
01
How Method Is Used
Meth
od
Depreciation of
value assets (pool)
low-
Organizations can use careful record keeping to calculate
discounts. That includes keeping detailed records of costs,
products, and tax-related issues. For example, when
reducing operating costs in Australia, a company can
prepare and access invoices, receipts and financial
statements (Hajiyev, 2021). This ensures compliance with
tax laws and allows for accurate deductions when
calculating taxable income.
Allow employees to exchange a portion of their salary for
non-cash benefits while following clear terms, ensuring
proper accounting and reporting in accordance with
Australian income tax laws (Hajiyev, 2021).
Pool assets worth less than specified thresholds, simplify
depreciation calculations, and reduce administrative burden
by applying appropriate regulated tax rates over time
(Hajiyev, 2021).
Question 6
Describe each of the listed ethical requirements associated with preparing financial reports
for corporate entities.
Ethical Requirement
a. Conflict of interest
b. Confidentiality
c. Disclosure requirements
Description of Requirement
The ethical requirement to avoid conflicts of interest in the
preparation of financial reports means that the people
involved in the reporting process must act impartially and
without personal or financial bias. They should not engage
in activities or relationships that could compromise their
goals or justice. For example, a financial controller may
have no financial stake in the company’s suppliers or
clients that could influence their reporting decisions (Hunt
et al., 2022).
The ethical requirement for confidentiality in financial
reporting is that sensitive financial information of
individuals participating in the scheme must be protected
from unauthorized disclosure. Financial information,
especially non-public and proprietary information, must
be ensured to prevent its leakage or misuse (Hunt et al.,
2022). Breaching confidentiality can undermine trust and
can damage a company’s reputation.
Because of the ethical requirements associated with
disclosure, all material information contained in financial
statements must be fully reported and transparent. This
means that organizations must provide clear, accurate, and
detailed information about their financial performance,
risks, and other factors that may affect stakeholder
decisions (Hunt et al., 2022). If information requirements
are not met disclosure is handled not only violates ethical
standards but can have legal and regulatory consequences
It can cause damage
Question 7
Review the Accounting Standard AASB 101 Presentation of Financial Statements, found at
the AASB website.
AASB Accounting Standards
https://aasb.gov.au/pronouncements/accounting-standards/
Complete the table below:
a.
Describe how each listed industry standard method can be used to present
financial data
b.
Describe how each listed industry-standard format can be used to present financial
data
Industry-Standard Method
BSBFIN401
Description of How It Can Be Used
i.
Accrual basis of presenting
financial statements
ii.
Going concern
Industry-Standard Format
i. Minimum information to be
presented on the face the
Balance Sheet as per clause
68 of the AASB 101
In accounting, transactions and events are recognized as they occur,
regardless of when cash or equivalents are received or paid and these
transactions are recorded in the accounting records and reported in the
financial statements at the time of in the relevant field (Brunelli, 2018).
The basic principle underlying the preparation of financial statements
is walking-work accounting. In accordance with AASB 101, when
preparing financial statements, management is expected to assess the
continuity of an entity as a past business (Brunelli, 2018).
Description of How It Can Be Used
The statement of accounts must include at least the following amounts
(Brunelli, 2018), if not already shown in accordance with Article 68A:
(a) Property, plant and equipment.
(b) Bank Assets.
(c) Intangible Assets.
(d) Financial Assets (excluding amounts specified under (e), (h), and
(i)).
(e) Calculation of investments made using the equity method.
(f) Organic property.
(g) Inventory.
(h) Merchandise and other receivables.
(i) Cash and cash equivalents.
At a minimum, the income statement must include a note (Brunelli,
2018), giving the following amounts for the reporting period:
ii. Minimum information to be
presented on the face the
(a) Income.
Income Statement as per
(b) Financial expenditure.
clause 81 of the AASB 101
(c) Profit or loss shares of partners and joint ventures accounted for
under the equity method.
(d) Tax expenditures.
(e) Consolidated accounts including (I) after-tax gain or loss from
discontinued operations or (ii) after-tax gain or loss are recognized
when measured at fair value less cost of sales shell.
Question 8
Describe the organisational financial information provided by each financial concept listed
in the table listed below:
Financial Concept
a. Budget variances
Description of Financial Information
Provided by Each Financial Concept
Budget variance provides information on the difference
between actual economic performance and the estimated
or anticipated estimates. They reveal where an
organization has exceeded or fallen short of its financial
goals, and help management identify areas for focus or
improvement (Avi, 2022).
b. Budgets
c. Forecasts
d. Cash flow reports
e. Profit reports
f.
Balance sheet reports
g. Financial year reports
h.
i.
j.
Operating statements
Expenditure
Receipts
k. Profit and loss statements
Budgets provide a comprehensive plan for an
organization’s expected revenues and expenses for a
specified period of time. They provide structured
budgets, direct resource allocation, set financial goals,
and enable performance analysis against established
goals (Avi, 2022).
Forecasting provides a forecast of an organization’s future
financial performance based on current information and
assumptions. They provide insight into expected revenues,
costs, and financial results, and assist in long-term
planning and decision-making.
Cash flow statements detail the flow of cash into and out
of an organization. They determine when and how funds
are raised and spent, help control cash flow, identify cash
flow issues, and ensure the organization can meet its
financial obligations (Avi, 2022).
The income statement, commonly referred to as the
income statement or profit and loss statement, shows the
income, expenses and profits of an organization for a
particular period showing whether the company made a
profit or loss on that during the period (Avi, 2022).
A balance sheet report provides an overview of an
organization’s financial position at a particular point in
time (Avi, 2022). Assets, liabilities, and investments are
recorded, providing information about a company’s
financial health and wealth.
Fiscal year reports summarize the financial performance
and position of an organization throughout the fiscal year
(Avi, 2022). Income statements, balance sheets and other
relevant financial information for the period are usually
included.
Performance information, similar to an income statement,
focuses on the performance of an organization (Avi,
2022). It contains statements of income, expenses, profit
or loss generated by the principal business activities.
Expense reports show an organization’s expenses in
various categories such as salaries, supplies, and invoices.
They help control and manage costs (Avi, 2022).
Receivables reports track all payments and receipts of an
organization (Avi, 2022). They provide revenue visibility
and can help prepare payments and invoices.
A profit and loss statement, also known as an income
statement, summarizes an organization’s income,
expenses, net income or loss for a specified period It
provides a concise overview of financial performance with
their focus is on profit (Avi, 2022).
l.
Asset classification refers to the classification of an
organization’s resources, such as current assets (e.g., cash,
accounts receivable), intangible assets (e.g., property,
plant, equipment), and intangible assets (e.g.)., patents,
trademarks). (Avi, 2022).
Types of assets
Property, plant and equipment (PPE) are tangible longlived assets used in the operations of an organization.
Financial information for PPEs includes a breakdown of
receivables, depreciation and impairment (Avi, 2022).
PPE reporting provides insight into an organization’s
investment in physical assets and their ongoing value.
m. Property, plant and equipment
n. Comparative
performance
financial
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Comparative financial performance analysis compares an
organization’s financial results and key metrics to
different periods or industry benchmarks to help measure
an organization’s performance, identify trends, and
measure its competitiveness in the marketplace (Avi,
2022). Comparative financial performance reporting
enables stakeholders to make informed decisions and set
future financial goals based on historical data and industry
standards.
Question 9
Describe the financial discrepancies listed in the table listed below:
Financial Discrepancy
a.
Absence of auditable trail
b. Expenditure report mismatches
c. Incorrect payments
d.
Unreconciled cash flows
Description of Financial Discrepancy
The lack of auditable guidance refers to a situation where there are no clear and
documented records of financial transactions or activities. This discrepancy can occur
when financial records are incomplete, missing or mismanaged. This makes cash flow
difficult to analyze and verify, creating uncertainty and potential issues that are
transparent and calculated (Malau et al., 2019).
A cost reporting discrepancy occurs when the costs recorded in the financial
statements do not match the actual costs incurred by an organization. This discrepancy
may be due to data entry errors, incorrect expense classification, or differences
between invoices and payment records (Malau et al., 2019). Resolving these
discrepancies is important to ensure accurate financial reporting and compliance with
financial constraints.
Incorrect payment refers to cases where a company has paid an amount that is not in
accordance with financial covenants or fixed obligations. These discrepancies can
result from overpayments, underpayments, or payments to the wrong customer (Malau
et al., 2019). Addressing incorrect payments is essential to preventing financial loss,
maintaining stakeholder trust and resolving potential legal and contractual issues
Cash mismatch refers to the difference between the recorded cash flow and the actual
cash flow of the organization. This can be due to inconsistencies in bank statements,
discrepancies between income and cash disbursements, or errors in cash flow records
(Malau et al., 2019). Mismatched cash flows can result in inaccurate financial
statements and withhold funds a efficiency and effective budgeting process. New
thinking is needed
References
Avi, M. S. (2022). SALES REVENUES MAKERS OF PROFIT, MONETARY CASH FLOW AND FINANCIAL RESOURCES. Journal of
Economics & Management Research, 3(3), 1-23.
Barra, S., Carta, S. M., Corriga, A., Podda, A. S., & Recupero, D. R. (2020). Deep learning and time series-to-image encoding for
financial forecasting. IEEE/CAA Journal of Automatica Sinica, 7(3), 683-692.
Brunelli, S. (2018). Audit Reporting for Going Concern Uncertainty: Global Trends and the Case Study of Italy. Springer.
Hajiyev, H. (2021). Accounting and tax accounting for the accrual of depreciation of fixed assets and ways of convergence. In SHS
Web of Conferences (Vol. 92, p. 02020). EDP Sciences.
Hunt, N. C., Curtis, M. B., & Rixom, J. M. (2022). Financial priming, psychological distance, and recognizing financial misreporting as
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Im, T., Lee, H., & Lim, D. (2018). Questionable Reform: The Adoption of the Double-Entry Bookkeeping and Accrual Basis Accounting
System in Korea. Journal of Policy Studies, 33(1), 57-80.
Malau, W. C., Ohalehi, P., Badr, E. S., & Yekini, K. (2019). Fraud interpretation and disclaimer audit opinion: evidence from the
Solomon Islands public sector (SIPS). Managerial Auditing Journal, 36(2), 240-260.
Raewf, M. B., & Jasim, Y. A. (2020). Information technology’s impact on the accounting system. Cihan University-Erbil Journal of
Humanities and Social Sciences, 4(1), 50-57.
Scott, B. (2020). OFAC sanctions compliance: Insights from recent enforcement actions. Journal of Financial Compliance, 3(3), 247254.
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