Reference no: EM132546243

Assessment Task 1

Performance objective:
In this task, you are required to respond to a range of prompt questions that examine your understanding of key legislative and financial management requirements for a case study organisation. This assessment also requires you to review available financial information and establish a budget for the organisation.

This assessment requires you to determine the requirements to undertake budgeting, financial forecasting and reporting requirements for an organisation. You will also need to review the case study provided and prepare a budget (in electronic spreadsheet format) and budget notes for distribution and implementation in the organisation.

Assessment Questions:

1. Read the case study.

2. Analyse the case study information and respond to the questions in the space provided.

3. Analyse the case study information (including business plan summary and previous financial data) and complete the following.
a. Develop a sales budget, profit budget, cash flow budget and debtor ageing summary using electronic spreadsheets (as separate worksheets) making sure each budget is divided into quarterly periods and that you use previous financial data to determine allocations for resources.
Ensure each budget you prepare complies with the organisational and policies and procedures as provided.
b. Develop budget notes which include:
i. identification of reasons for previous profits and losses
ii. your comment on the effectiveness of existing financial management approaches
iii. all assumptions and basis that have been made or used to form budgets
iv. any relevant notes regarding implementation and monitoring of budget expenditure.
4. Communicate information regarding the budget and answer a series of prompt questions in written or oral form as agreed with your assessor.

Specifications

You must provide:
• a completed annual budget in a single spread sheet with a separate sheet for each budget component
• budget notes and question answers in a written format.

Your assessor will be looking for:
• evidence that you understand the required legislative requirements
• evidence that you can identify suitable software for financial management
• evidence you have reviewed the case study information provided by submitting an appropriate budget with budget notes
• evidence that you have clearly communicated information regarding the budget and correctly responded to a series of questions.

Based on the information provided in the case study answer the following questions in the space provided below:
Identify the current statutory requirements for tax compliance and list and calculate the tax liabilities for Houzit Pty Ltd under taxation legislation.

1. Identify the current compliance requirements and liabilities for this organisation under the Corporations Act 2001.

2. Review commercially available financial management software to select the most suitable software for Houzit Pty Ltd.

Ensure you diagnose software options by comparing two commercially available software titles against the capabilities of the existing technology for the organisation and against the prioritised requirements, and outline the reasons that lead you to this recommendation.

3. Explain how you can apply the following principles of accounting in developing the budgets required for this task:
a. matching principle
b. account groups
c. time periods.

4. Explain and discuss the implications of probity when preparing and revising budgets.

5. List the critical dates and initiatives that will require or generate resources for Houzit Pty Ltd in the next financial cycle.

6.List the items you would recommend for inclusion in the budgets for Houzit Pty Ltd.

7.List the new or modified internal controls that could improve risk management for Houzit Pty Ltd including the maintenance of audit trails.

Assessment Task 2

Assessment Questions:
1. Read the case study.
2. Develop a variance report based on the format and template provided by Houzit.
3. Complete a cash flow analysis on the average length of time it takes Houzit to collect funds from its debtors to determine the trend based on the financial reports in Assessment Task 1.
4. Examine the sales budget, profit budget, cash flowbudget and debtor ageing summary to identify the following:
a. Issues:
i. Identify, describe and prioritise significant issues that are evidenced in the provided case study information and describe reasons or causes of these issues. Include in this issue of financial probity that you have identified or considered when monitoring these budgets.
b. Variances:
i. Complete an actual-to-budget variance report, using the template provided in the case study.
ii. Identify variances by comparing actual results with the established budget and provide reasons why these variances may have occurred.
c. Performance:
i. Compare financial performance of the organisation (according to financial information provided) to industry benchmarks for this organisation in line with the retail trade sector.
ii. Respond to the performance questions provided by the CEO, as provided by the board of Houzit,
iii. Determine a trend of the average debtor days and the impact to the cash flow of Houzit.

d. Recommendations:
i. Outline your recommendations for ongoing financial viability for the organisation, based on your assessment of the issues, reasons for variances and organisational performance you have identified (Steps 1-3).
ii. Include in this section your plans for a revised budget, effectively managing contingencies and issues that have been identified in feedback and monitoring of the budgets.
e. Evaluation:
i. Provide a summary review of the financial management processes in place for the organisation, in light of your assessment of the issues, reasons for variances and organisational performance you have identified. Include in this section any recommendations you have for modifying management processes.

Attachment:- Monitor And Review Budget.rar