BSBFIM601 Assessment

Assessment 1: Short Answer Questions

Question 1
Explain the requirements of financial probity.

Question 2
Personnel working in the financial services division of a company need to understand and be
able to explain principles of accounting and financial systems (Accounting and Financial
Information Management Systems—AIS and FIS). What are accounting and financial systems
and how do they assist business operations?

Question 3
List and explain at least 4 forms of legislation and conventions (Australian, international and/or
local) that could apply to financial management in the organisation.

Question 4
Explain the requirements for each of the following:
Goods and Services Tax
Company Tax
PAYG

Assessment 2: Case Study

You work as financial manager of ABC Company and you need to have all of the organisation’s
budgets in place by the beginning of the last quarter in the financial year. All the financial
figures and policies and procedures have been provided to you.
Complete the following tasks.

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1. Assess and read the budgeting and financial planning procedures to familiarise yourself
with the responsibilities and procedures of the budgetary process. Using this document
as a guide, prepare a plan and time line with critical dates for preparation of the
organisation’s budgets for the next financial year (2016/17). Assume that it is now early
March 2016.

2. Access and read the company business plan. Note the business goals that are listed to
maintain financial stability. Put the financial information into a spreadsheet and prepare
a histogram that clearly shows the financial plan for the next 5 years. Use the histogram
and the supporting dot-points from the business plan to promotes the direction that
future budgets will need to take.

3. Access and read the financial reports. Which have been collated from the organisation’s
financial system. Using these reports, prepare a report on the organisation’s current
financial position to guide the planning for budget preparation. This report needs to:
 Demonstrate analysis of the net profit margin, net profit ratio, cashflow return
on assets and return on owner’s equity ratio for 2014/15
 Demonstrate horizontal analyses of the areas of the business that have the
greatest impact on the business’s profit and loss
 Identify major variances in the profit and loss budget and explain the likely
impact on the business’s annual performance
 Show the organisation’s current position in relation to the previous years by
summarising the cashflow trends
 Contain a list of recommendations for ongoing maintenance of financial
viability

4. Prepare preliminary 2016/17 budgets for the whole organisation that align with the
business plan objectives that will set a framework for the budget committee to use
through the budgetary development process. The base information, worksheets and
underlying assumptions for each preliminary budget have been provided. It is
preferable to develop the budgets using spreadsheet software. The budgets that you
need to prepare include:
 A forecasted cashflow budget for the 2016/17 financial year
 A forecasted profit and loss budget for the 2016/17 financial year
 A forecasted balance sheet as at 30 June 2017

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 5. Prepare a risk management plan to ensure that the risk of funds misappropriation and
discrepancies is minimised. This risk management plan should identify the internal
controls relating to funds misappropriation and discrepancies.

6. Assess and read risk management policy and risk management procedures. Identify and
assess key financial risks to the organisation in achieving its objectives in the 2016/17
financial year. Develop a risk management plan, suing the template below, with
appropriate contingency responses for the factors that are identified as high risk (at
least 2). The risk management plan should also contain contingency responses in the
event that identified risk controls will not be sufficient to manage the issues. Ensure
that suitable triggers are identified to determine when contingency responses should be
implemented.
Identification and analysis

Grade Level of likelihood

A Expected (will occur regularly)

B Probable (will occur at some stage)

Risk likelihood legend
C Possible (could occur)

D Improbable (could occur but unlikely)

E Rare (may occur but in limited situations)

Grade Level of impact

Risk impact/
1 Insignificant
consequence legend

2 Minor

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 3 Moderate

4 Major

5 Catastrophic

Risk categorisation matrix

Level of Level of impact
likelihood
1 2 3 4 5
(Insignificant) (Minor) (Moderate) (Major) (Catastrophic)
A (Expected) Medium Medium High Extreme Extreme
B (Probable) Medium Medium Medium High Extreme
C (Possible) Low Medium Medium High High
D (Improbable) Low Low Medium Medium High
E (Rare) Low Low Low High Medium
Risk categorisation table

Priority Risk Likelihood Impact Level of risk

Risk control/treatment
Activity:
Risks

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Control measures/ Control measure Strength Weakness
treatments

Impact of risk/s on
areas outside your
responsibility

Personnel involved

Expected outcomes
of risk treatment
plan

7. Prepare a checklist that can be used to review the effectiveness of ABC Company’s
budgeting and financial planning procedures and helps to ensure compliance with
organisation and statutory requirements. Your checklist must cover plan the evaluation,
gather information, analyse information, develop recommendations and plan
improvements and implement and monitor improvements.

8. Develop and provide an audit checklist to guide staff in collecting and assessing
information to review financial management software, managing risks of
misappropriation of funds, ensuring systems are in place to record all transactions,
maintaining an audit trial and complying with due diligence.

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9. Present this report verbally to your board (assessor) in order to demonstrate your
communication skills as well as the ability to explain budgets and deal with questions.
Analyse the existing financial management approaches of the organisation. Are there
any recommendations you should make and what are they? You need to ensure your
board (assessor) is clear about your budgets.

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