How To Identify Compliance Requirements And Develop Accounting Competence

Clarify business needs and expectations of work

Keeping an effective communication with the clients is important to not only maintain a good relationship with the clients but also to understand the different requirements of the clients and accordingly provide services to clients to fulfill those requirements.      

Part b: 

Business needs	Accountant (Registered with TPB and ASIC) Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Bookkeeper (Registered with TPB)	Tax Agent (Registered with TPB and ASIC)
Petty cash and bank reconciliation	To maintain proper accounting records for petty cash expenses. Preparation of periodical bank reconciliation statement.	Maintain books of accounts.	X
Prepare depreciation schedule	Record depreciation entries correctly.	Correctly calculate depreciation in the books of accounts.	To check whether depreciation is accordance with tax laws for tax purposes.
Accounts receivable and payable functions	Preparation of accounts payable and accounts receivable.	Maintain accounts payable and receivable books correctly.	X
Prepare and lodge tax returns and ASIC	Prepare and lodge return	X	Check the returns
Payroll functions	Prepare and maintain payroll schedules	Properly include payroll in books of accounts	X
Prepare and lodge activity statements	Prepare and lodge such statement	X	X
Prepare accounts to trial balance	Trial balance preparation	X	X
Prepare and analyse financial reports	Preparation of financial reports	X	X
Prepare and lodge Company Tax Return	X	X	Preparation and lodging of Company Tax Return
Maintain records of transactions	X	Maintain all such transactions in books of accounts.	X

• Auditors and qualified Certified Accountants of Australia.  
• Superannuation and investment experts.
• Information & Technology professionals.
• Financial advisers.

Letter of Engagement

To,

Mr David Brown,  

51 Burke Street,

Melbourne, Vic-3000

Australia.  

Ref: Engagement letter:

Respected sir,

This letter will help you understand the scope of our work in relation to your business. Our responsibility is to prepare the books of accounts for your business based on the information provided by you and your staffs. Thus, we shall not verify the true and fair nature of the information. It is not an audit engagement rather an engagement to maintain the books of accounts to record financial transactions of your business in the books of accounts.

The books of accounts shall be prepared in accordance with the applicable accounting standards to the nature of business carried out by you. Up-to-date accounting records shall be maintained and provided to your staffs as and when required to enable them to take important business decisions. The information collected about your business shall not be disclosed by us to anyone without your permission and as required under the laws (Guthrie and Parker, 2016). In case of any contravention with the terms and conditions of the engagement then the engagement shall be liable to be cancelled based on your final assessment and decision on the issue.     

Please carefully read the above letter and acknowledge the engagement letter. In case of any confusion with any points of the letter please do not hesitate to contact.     

1. Have the necessary information required by the client has been made available to the client as and when needed?
2. Do the client have up-to-date accounting information to assess and evaluate the financial position of the business at any point of time?
3. Is the books of accounts have been prepared correctly as per the accounting standards in the count

• The small business must keep records of its financial transactions in an appropriate manner to correctly portray the true and fair picture of the small business as on a particular date. The books of accounts must be maintained in accordance with applicable accounting standards in the country. Small businesses required to maintain books of accounts and prepare profit and loss account and balance sheet as at the end of each accounting year (Carnegie, 2014).   
• GST registration is mandatory for small business with GST turnover threshold limit of $75000 per annum. For GST all input and output documents shall be maintained properly. GST on sales shall be paid after deducting input GST paid by the business. GST returns shall be filed as per the Income Tax Assessment Act 1997.
• PAYG withholding is the liability of the employer to withholding certain amount of gross salaries and wages to be paid to the employees. PAYG Withheld must be deposited to the credit of central Government on or before due date as per the guidelines issued by the Australian Taxation Office (ATO).  
• Fringe Benefits Tax is the tax payable by the Employer for certain kind of non-monetary benefits provided to the employees. Employer in order to motivate the employee often incurs additional expenditure by providing non-monetary benefits such as car facility, house, loan without or at concessional rate of interest etc. FBT is calculated on the grossed up value of such benefits as per the taxation law in the country (Sangster, 2015).
• Payroll tax is the tax payable by the employees for the profession he or she is in.

Requirement	Authority	Research source
Business Activity Statement (BAS) requirements	Australian Taxation Office (ATO)	www.ato.gov.au
Australian Accounting Standards	Australian Accounting Standards Board (AASB)	www.aasb.gov.au
Tax Practitioners Board requirements	Tax Practitioners Board (TPB)	www.tbp.gov.au
Privacy Act	Office of the Australian Information Commission	www.oaic.gov.au/privacy-law/
Taxation Act	Income Tax Assessment Act 1997	www.legislation.gov.au/Details/C2017C00336
Trade Practices Act	Federal Register of Legislation	www.legislation.gov.au/Details/C2010C00426

1. Accounting system.
2. Information system.

• Management system.

1. Data processing system.  

Development of petty cash system policy:

The cash disbursed for petty cash expenses by the cashier shall be recorded as receipt in petty cash system. The different petty cash expenses incurred from such amount shall be recorded as payments in the petty cash system. The balance in petty cash system after petty cash expenditures if negative then the amount shall be reimbursed by the cashier. In case the amount is positive then the amounts shall be transferred to the cashier (Chenhall and Moers, 2015).

The petty cash claim of employees shall be met by signing petty cash vouchers by the concerned employees. The petty cash expenses shall not be met above a certain limit for the employees.

Checking the petty cash claim document properly to evaluate whether the cash expenses is properly supported by necessary documents to justify such petty cash expenses. All the supporting documents must be attached with petty cash vouchers. The vouchers shall have proper authorization to ensure that only eligible expenses are paid from petty cash (Andersson et. al. 2016).

The accounts receivable flow chart provided in the document lacks clarity and is not effective. A standard accounts receivable flow chart shall be as following instead of the one provided in the document.

Autonomously:

1. Sole proprietorship business.
2. Ability to take decisions and understand situations quickly

Team environment:

1. Team spirit.
2. Friendly work environment.

• Efficient Management.

1. Cooperation between team members.
2. Single Objective and aim.   
3. Report though STP for A (client).
4. 2018 summary of PAYG withholding payment annual report for B (client).

• Monthly Business Activity Statement (BAS) for B for the month of June.

1. Quarter 4 (June) BAS for B.      

By communicating the efforts to the employees and if possible by rewarding the employees for their efforts and contributions will encourage the employees to give their best for an organization.

1. Evaluation of steps taken.
2. Assessment of the results achieved by the team.

• Comparison of the results achieved by the team with the objectives.

1. Identification of the gap between the results achieved and the desired objectives.
2. Identification of the reasons for the gap and other problems.
3. Taking necessary steps to resolve such issues.

Innovation of new technology has changed the way business organizations used to function once. In fact accounting services and book keeping services have also changed significantly with the innovation and technology coming to the fore front with new accounting system and software. Thus, it is essential to change the way work used to be perform earlier to be relevant in the profession.  

1. The specific goal is to improve the quality of professional services.
2. The performance shall be measured by measuring the revenue generated from professional services.

• The goal is to have large number of clients in future which is quite attainable by improving the quality of services.  

1. Realistically it is possible to even increase the professional fees by improving the quality of professional services.
2. The time frame shall be decided within which the above goals have to be achieved by the professionally qualified accountant and book keeper.
3. Improvement of professional services is possible by increasing the knowledge in the field of accounting. Apart from that use of new and innovative technology would help the professional to improve the quality of professional services.
4. Proper feedback shall be collected to measure the quality of professional services.  

• Larger client base shall be achieved by adverting and marketing.

1. Professional fees shall be increase subsequent to improving the quality of professional services.
2. Period of review of professional services and client base shall be conducted.

Association with the Certified Public Accountants is as an accountant whereas association with the clients to prepare books of accounts is as a book keeper.  

A person must be above 18 years old in order to be eligible to apply for registration as Individual BAS agent with Tax Practitioners Board (TPB). In addition the following are the minimum requirements to be eligible to be an individual BAS agent:

1. The person must obtain at-least a Certificate IV in Finance Registered Training Office (RTO).  
2. The person must be of sound mind and fit.

• There should not be any legal case pending against the person.

1. The person should not have been convicted under case or law in or outside the country.
2. The person should not be insolvent.
3. The person should apply online in the TPB portal to become a BAS agent.

• Shall fill up the online form and attached all necessary documents during the filing process of on-line application (Andersson al. 2016).

References: 

Andersson, U., Dasí, À., Mudambi, R. and Pedersen, T., 2016. Technology, innovation and knowledge: The importance of ideas and international connectivity. Journal of World Business, 51(1), pp.153-162.

Carnegie, G., 2014. Pastoral accounting in colonial Australia: a case study of unregulated accounting. Routledge.

Chenhall, R.H. and Moers, F., 2015. The role of innovation in the evolution of management accounting and its integration into management control. Accounting, Organizations and Society, 47, pp.1-13.

Guthrie, J. and Parker, L.D., 2016. Whither the accounting profession, accountants and accounting researchers? Commentary and projections. Accounting, Auditing & Accountability Journal, 29(1), pp.2-10.

Sangster, A., 2015. The genesis of double entry bookkeeping. The Accounting Review, 91(1), pp.299-315.