Manage Finance Portfolio of Evidence

Question: Discuss about the Manage Finance Portfolio of Evidence. Answer: Portfolio of Evidence Financial management software would you recommend For each and every business organization, accounting or financial system is required to be managed so as to lead better management of business operations. In this regards there are various financial management software that business organization or management of Club Train can use. MYOB (Mind Your Own Business) is one of the popular and useful financial management software that can be used by management of Club Train for financial management. MYOB software provides accounting, taxation, payroll and many other accounting services to small scale business organization. MYOB can manage payroll, stock control, Australian taxation matters and book keeping of Club Train. Manage risks of misappropriation of funds Risks of misappropriation of funds are the risk that business organization shall manage in order to run their business smoothly and reliably. Misappropriation of funds can take place in day to day operations while dealing with customers, managing cash and using resources of business organization. In case of Club Train, management shall develop strong internal control system which ensures checking of ones work at next level of operation [1]. Accountant of Club Train shall ensure that cash register balance shall be tallied with physical cash balance. Cameras and stock takes shall be placed to ensure that there will be no theft of funds. Ensure systems are in place to record all transactions In order to ensure that systems are in place to record all transactions, there shall be strong internal control on various sections of business operations. Management of Club Train shall use double entry accounting or bookkeeping system under which dual impact of one transaction can be analysed. In order to ensure all banking transactions are recorded, management of Club Train shall use bank reconciliation system under which bank transactions are tallied with bank pass book. Internal check shall be implemented while undertaking business operations by delegating responsibilities to ensure recording of all transactions [2]. Maintain an audit trail and comply with due diligence Audit trail is process of maintaining documents from start point of transaction till its completion. Financial transactions of Club Train should have some input document or source document so that initial point of transaction can be determined. Source document shall be authorised and legal. All the records shall be kept at safe secure and in systematic manner by management of Club Train. Management of Club Train shall ensure invoice number and dates are mentioned in journal. Ledgers shall have journal number and dates in it. Elements of financial probity Financial probity can be defined as the clear and fair process that ensures equitable process of business transaction. In order to ensure financial probity management of Club Train shall ensure transparent and accountable audit trail. Each employee can be identified that has conducted misappropriate can be identified [3]. There shall be fair and equitable process in Club Train and potential liabilities shall be minimised from complex and long process. 5 principles of accounting Dual aspect- This principle ensures that every transaction shall have dual impact on assets, liabilities or equity of the business organisation. Realization principle- As per this principle, all expenses and liabilities shall be realized as and when they occur and on the other hand all profits and incomes shall be realized when cash is received. Consistency- According to this principle, one any method is followed then it shall be maintained during lifetime of Club Train and can only be changed on some strong and legal grounds[4]. Materiality- All material transactions involve substantial amount shall be recorded and presented. Matching- Transactions and decisions of business organisation shall match with its financial statements or records. Explain Australian and international legislation and conventions that are relevant to financial management in the organisation Australian Accounting standards or International Financial Reporting Standards are most important international legislation that is required in recording and presenting financial statements [5]. Provisions defined by Australian Commonwealth government and Australian Securities and Investment law are created by government and their provisions are relevant for financial management for Club Train. Link to the Australian Tax Office relating to businesses tax obligations. https://www.ato.gov.au/A-Z-index/AZItems.aspx?sorttype=AZIndexmarketsegment=Business [6] Goods and Services Tax- GST is impost of goods and services provided or received during the financial year. GST is charged @ 10 % on goods and services. Basic food and drinks are some GST free goods and education, medical and finance is some GST free services [7]. Club Train and other business organisations are required to present business activity statement in front of ATO in order to filing GST return and paying taxes [8]. Company Tax- Company tax is payable by companies only whether public company or private company. Company tax is charged @ 30 % flat on all companies except those companies having title of small business. Companies having revenue of less than 2 million are considered as small business and company tax is 28.50 %. Pay As You Go (withholding) - These are tax which is deducted by employer from the salary of employee as earned by employee and paid by employer. PAYG is progressive tax system which starts beyond the income level of $ 18,000. Employer (Club Train) is liable to send money deducted from employees pay to ATO and shall report Business Activity statement [9]. Process of communicating with other stakeholders the following information Reporting on financial activity and making recommendations- Management of Club Train can communicate with different stakeholders related to financial activities. To communicate financial reports financial statements (income statement, balance sheet, cash flow statement and statement of change in equity) shall be used. To communicate with government, business activity statement shall be used. Meetings with key stakeholders shall be conducted by management of Club Train to ensure proper communication. Identifying and prioritising significant issues- Budgets can be used to ensure effective communication to order to identify and prioritise significant issue in Club Train operations. Priority shall be assigned to issues in terms of their impact of business operations and on its objectives. Ensuring managers and supervisors are clear about budgets- Meetings and briefings shall be undertaken to ensure clarity regarding budgets. Training and drills shall be undertaken by management of Club Train to ensure clarity about budgets. References Dimitrijevic, D., Milovanovic, V., Stancic, V. (2015). The role of a company's internal control system in fraud prevention. E-Finanse, 11(3), 34-44. Michelon, G., Bozzolan, S., Beretta, S. (2015). Board monitoring and internal control system disclosure in different regulatory environments. Journal of Applied Accounting Research, 16(1), 138-164. Rebecca Moore. (2016). Key Elements of Financial Wellness. Planadviser, Planadviser, 2016. Cory, S. (2010). Principles of Accounting. Issues in Accounting Education, 25(2), 347-348. Chalmers, K., Clinch, G., Godfrey, J. (2011). Changes in value relevance of accounting information upon IFRS adoption: Evidence from Australia. Australian Journal of Management, 36(2), 151-173. https://www.ato.gov.au/A-index/AZItems.aspx?sorttype=AZIndexmarketsegment=Business Garner, S., Ng, K., Learning Essentials. (2006). Accounting for the GST in small business case studies of accounting issues. Bendigo, Vic.]: Learning Essentials. Goods and services tax. (2016, June 14). Mena Report, p. Mena Report, June 14, 2016. Smith, K. (2013). Tax Guide. Charter, 84(4), 52-53. Dimitrijevic, Internal control system in fraud prevention, 34-44 G. Michelon, Internal control system disclosure, 138-164 Rebecca, Elements of Financial Wellness, 2016 S. Cory, Principles of Accounting, 347-348 K. Chalmers, Relevance of accounting information, 151-173 https://www.ato.gov.au/A-index/AZItems.aspx?sorttype=AZIndexmarketsegment=Business S. Garner, Accounting for the GST, 2006 Goods and services tax, Mena Report, 2016 K. Smith, Tax Guide, 2013, 52-53