Reference no: EM132198617

FORMATIVE LEARNING CHECKPOINT 1 - PLAN FOR FINANCIAL MANAGEMENT

This learning checkpoint allows you to review your skills and knowledge in planning for financial management.

Formative assessment

Formative assessment generally takes place at regular intervals before and during training with progressive feedback to improve competence.

Formative assessment is assessment for learning: it focuses on the gap between where learners are in their learning and where they need to be to achieve the requirements of the unit under study.

Part A

1. Explain the relationship between Australian Accounting Standards and accounting principles.

2. Define ‘financial probity'

3. Why does the balance sheet not provide an accurate picture of the organisation's profitability?

4. What is the value of performing breakeven analysis?

5. Why may an organisation be required to register for and remit fringe benefits tax (FBT)? Where are FBT payments recorded in the organisation's chart of accounts?

6. What ratio would you use to analyse trends in an organisation's cashflow over a number of periods? Why?

Part B

In this section you are required to consider the implementation of budgets for your organisation, or one that you are familiar with. This may be an organisation that you have previously worked for or one that you are in close contact with, such as your training provider, a not-for-profit organisation you volunteer for, or a sporting or social club.

1. Document the organisational planning and financial cycle.

2. Assess your organisation's business and accounting software's ability to meet organisational and statutory requirements. Outline you findings.

3. Review your organisation's most recent profit and loss statement. If you are reviewing the statements of an organisation that you do not currently work for, locate its annual report and make your calculations based on the information from the annual statements. Calculate the organisation's:

• gross profit margin

• net profit margin

• net profit ratio

• return on owner's equity

• return on assets.

4. Research the organisation's tax obligations, then answer the following:

a) What are the due dates for lodging and paying GST?

b) What are the due dates for lodging and paying income tax?

c) What are the due dates for lodging and paying relevant state/territory tax?

FORMATIVE LEARNING CHECKPOINT 2 - ESTABLISH BUDGETS AND ALLOCATE FUNDS

This learning checkpoint allows you to review your skills and knowledge in establishing budgets and allocating funds.

Part A

1. Explain the relationship between zero-based budgeting, resource allocation and the estimate of new items for inclusion in budgets

2. When would you review the cost of goods sold (COGS) forecast to determine gross profit margins?

3. What would you review during the profit and loss budget setting process to determine net profit margins?

Part B

In this section you are required to consider the implementation of budgets for your organisation, or one that you are familiar with. This may be an organisation that you have previously worked for or one that you are in close contact with, such as your training provider, a not-for-profit organisation you volunteer for, or a sporting or social club.

1. Does the organisation take a top-down or bottom-up approach to budgeting? Refer to the budgeting policy, procedures and/or guidelines to determine why the organisation takes this approach. If you are unable to access this information, consult the general manger or finance director.

2. Document the organisation's process for developing the cash budget in accordance with statutory and organisational requirements. Include in your process those who are involved in, and methods of collaboration for, setting budgets.

3. Imagine there are rumours that the company tax rate will increase from 30 to 33 per cent. Consider the impact of such an increase on the organisation's cashflow.

a) Identify whom you would consult with to consider implications and develop controls.

b) Rate the risk, using the risk assessment matrix, and identify the level. Explain the reasons for the level.

c) Identify a measure to control the risk.

d) Identify a contingency response and explain the reason for the selected trigger.

e) Explain how you would ensure the budget is revised to take the change into account.

FORMATIVE LEARNING CHECKPOINT 3 - IMPLEMENT BUDGETS

This learning checkpoint allows you to review your skills and knowledge in implementing budgets.

Part A

1. What is an audit trail and why is it critical that it be maintained?

2. Why is it critical to conduct variance analysis of budgets on a monthly basis and to report this analysis, according to financial reporting requirements, to senior decision-makers?

3. What will a review of the organisation's accounts receivable ageing summary enable managers to identify? Why is this important?

Part B

In this section you are required to consider the implementation of budgets for your organisation, or one that you are familiar with. This may be an organisation that you have previously worked for or one that you are in close contact with, such as your training provider, a not-for-profit organisation that you volunteer for, or a sporting or social club.

1. Document the budget circulation process and identify the methods and communication techniques you would use in the process. Consider using a diagrammatic approach to demonstrate it, such as a flow chart.

2. Review the organisation's internal control measures.

a) Outline the organisation's internal control measures for minimising the risk of funds misappropriation and discrepancies.

b) Explain how the measures comply with relevant statutory requirements.

3. How would the organisation manage unfavourable variances in the cash budget as a result of a major client regularly paying their invoices late?

FORMATIVE LEARNING CHECKPOINT 4 - REPORT ON FINANCES

This learning checkpoint allows you to review your skills and knowledge in reporting on finances.

Part A

1. How do statutory requirements affect the content and structure of organisational financial reports?

2. Which agencies have developed Standard Business Reporting (SBR) enabled reporting?

3. What risk management tool can be used to prioritise significant issues in statements?

4. What must the recommendations be ultimately aimed at?

5. Explain the relationship between internal controls and organisational objectives.

6. What analyses may be used to provide information for tender or proposal bid estimates?

Part B

In this section you are required to consider the reporting of financial statements and methods for conducting an audit of financial management processes for your organisation, or one that you are familiar with. This may be an organisation that you have previously worked for or one that you are in close contact with, such as your training provider, a not-for-profit organisation that you volunteer for, or a sporting or social club.

1. Outline the report presentation requirements (content and structure) for a monthly financial report. Ensure you identify how recommendations to improve positions are presented, whether independently or within the monthly report.

2. Document the tools and techniques used to identify significant issues in statements, and for prioritising issues for responses.

3. Develop a checklist for an internal audit of the organisational internal control.

FINAL SUMMATIVE ASSESSMENTS

HOW TO WORK THROUGH THIS FINAL ASSESSMENT

This final assessment is designed to assess your performance of competency for the unit BSBFIM601MANAGE FINANCES, Release 1. Your assessor or workplace supervisor will help you fully understand assessment requirements for this unit.

The features of this final assessment are detailed in the following table.

Feature of the assessment resource Explanation

Assessment information and scope This section provides details of the unit of competency covered, setting out information about the aims of the unit, what areas are covered, how the assessment tasks must be completed and how the assessment is conducted.

Are you ready for assessment? This section provides you with the opportunity to self-assess your performance, to ensure that you are ready to commence the assessment process.

Final assessment overview This section provides an outline of the final assessment tasks to be covered, including options available.
Assessment plan You can confirm exactly which tasks and options you will complete using the assessment plan. Your assessor will discuss the various options with you and may also customise the assessment tasks to suit specific requirements where needed.

Final assessment tasks This section outlines the final assessment tasks in detail, including the relevant documentation you need to complete and submit along with your final assessment tasks.

Record of outcome As you progress through the final assessment tasks, your assessor will use the record of outcome to confirm your performance and provide relevant advice and feedback.

FURTHER INFORMATION

Before you commence your final assessment tasks, you should review the information provided by your training organisation about assessment. You should not commence your final assessment tasks until you have read and understood this information.

ASSESSMENT INFORMATION AND SCOPE

Who is the final assessment designed for? The final assessment is designed for candidates to demonstrate their competency having completed formal learning experiences in this unit. Candidates may be in a real or simulated workplace environment. Candidates may be undertaking the unit in a range of learning situations, including private study, via a traineeship arrangement or via other workplace-supported means.

What are the aims of the final assessment tasks? This unit describes the skills and knowledge required to undertake budgeting, financial forecasting and reporting and to allocate and manage resources to achieve the required outputs for the business unit. It includes contributing to financial bids and estimates, allocating funds, managing budgets and reporting on financial activity.

It applies to individuals who have managerial responsibilities which include overseeing the management of financial and other resources across a business unit, a series of business units or teams, or an organisation. It covers all areas of broad financial management. In a larger organisation, this work would be supported by specialists in financial management.

The key outcomes are:

• Plan for financial management

• Establish budgets and allocate funds

• Implement budgets

• Report on finances

Prerequisites and co-requisites None

Legislative and licensing requirements No licensing, legislative or certification requirements apply to this unit at the time of publication.

SELF ASSESSMENT CHECKLIST

ARE YOU READY FOR ASSESSMENT?

You must ensure that you are ready to begin the final assessment. Complete the following self-assessment checklist to confirm that you hold the skills and knowledge required and feel ready to undertake a successful final assessment.

Topic Key outcomes

I am able to perform skills and demonstrate knowledge satisfactorily in the following tasks. q Topic 1 Plan for financial management q 1A Identify accounting principles and standards
1B Determine areas of profit and loss
1C Determine required resources for organisational strategy implementation
1D Review statutory requirements and taxation liabilities

Topic 2 Establish budgets and allocate funds q 2A Set budgets and allocate financial resources

2B Prepare the cash budget

2C Prepare the profit and loss and balance sheet budgets
2D Develop risk and contingency plans

Topic 3 Implement budgets q 3A Circulate budgets to managers and supervisors

3B Implement controls to minimise risk of improper financial behaviour
3C Determine budget variances and manage contingencies

Topic 4 Report on finances q 4A Ensure reporting conforms to requirements
4B Prioritise significant issues and prepare recommendations
4C Evaluate the effectiveness of financial management processes

If you have covered and feel confident in all of these areas, you are ready to proceed to the final assessment.

Before you commence the assessment process, discuss with your assessor or workplace supervisor any areas you do not feel confident in or have not covered.
 
ASSESSMENT TASK - PART A - QUESTIONING

Purpose You will demonstrate a sound knowledge of the unit requirements in your responses.

Instructions to the candidate All questions must be answered satisfactorily for Part A to be completed satisfactorily.

There is no restriction on the length of the question responses, or time restriction in completing the assessment.

You must complete all questions unassisted by the assessor or other personnel, but may refer to reference material as needed.

Resources required The question responses section is the only resource required for this questioning assessment to be completed.

Assessment conditions Assessment must be conducted in a safe environment where evidence gathered demonstrates consistent performance of typical activities experienced in the financial management field of work and include access to:

• financial data

• relevant legislation and Australian Tax Office requirements

• examples of business plans, profit and loss statements, cash flows and aging summaries

• organisational financial policies and procedures

• financial management software.

Assessors must satisfy NVR/AQTF assessor requirements.

Reasonable adjustment If you do not wish to respond to the questions in written form, an interview may be used as an alternative approach if negotiated with your assessor.

CANDIDATE TO COMPLETE:

Candidate name:

Date of assessment:

Assessment declaration: I declare that no part of this assessment has been copied from another person's work, except where clearly noted on documents or work submitted.

I declare that no part of this assessment has been written for me by another person. I understand that plagiarism is a serious offence that may lead to disciplinary action by my training organisation.

Candidate signature:

QUESTION 1:

Describe the principles of accounting and financial systems as they apply to your organisation.

QUESTION 2: Explain Australian, international and/or local legislation that is relevant to financial management in your organisation.
 
QUESTION 3: Outline the ATO requirements, including GST, company income tax, PAYG and superannuation obligations, as they apply to your organisation. Include the due dates for the lodgement and payment of obligations in your response.
Answer:
Trainer Feedback
Marking: q Satisfactory q Unsatisfactory

QUESTION 4: Identify what the probity requirements and related conventions are in your organisation as they relate to preparing the organisation's budget.

Make reference to your organisation's policies and procedures.

QUESTION 5: What legislation applies to fraud and the misappropriation of funds?

Question 6: Explain the need for financial due diligence and outline what actions may be included in a financial due diligence review.
 
QUESTION 7: Explain how you use P&L statements, cashflow and ageing summaries to manage issues that will affect the organisation's ability to meet objectives.

QUESTION 8: Explain how forecast analyses and analyses related to budget preparation will enable you to contribute to financial bids and estimates.

QUESTION 9: What can the organisation do to maintain an audit trail to ensure accurate tracking and to identify discrepancies between agreed and actual allocations?

QUESTION 10: List considerations when reviewing existing software and its suitability for financial management.
 
QUESTION 11: Why is it important to circulate budgets and ensure managers and supervisors are clear about budgets, reporting requirements and financial delegations?

QUESTION 12: Briefly explain how using previous financial data can help determine allocations for resources.

QUESTION 13: Give an example of a budget and/or budgeted statement that must be prepared in accordance with statutory requirements.