Assessment Task 1

Performance objective

For this task you are required to respond to a range of questions that examine your understanding of key legislative and financial managementrequirements for a case study organisation.This assessment also requires you to review available financial information and establish a budget for the organisation.

Assessment description
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.

Procedure

Part 1
1. Read and 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 summaryusing 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.
i. Ensure each budget you prepare complies with the organisational and policies and procedures as provided.
b. Develop budget notesthat 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 bases that have been made or used to form budgets
iv. any relevant notes regarding implementation and monitoring of budget expenditure.
Part 2
1. Communicate information regarding the budget and answer a series ofeightquestions(see end of this task) in written or oral form as agreed with your assessor.

Specifications
You must submit:
- 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 you have reviewed the case study information provided by submitting an appropriate budget with budget notes
- evidence that you understand, and can explain, the required legislative requirements of financial management (and outline statutory requirements of ATO, GST, company tax, PAYG)
- evidence that you can outline compliance requirements for the Corporations Act 2001
- evidence that you can identify and recommend use of suitable software for financial management
- evidence that you have clearly communicated information regarding the budget and correctly responded to a series of questions (e.g. describe the principles of accounting and financial systems)
- evidence that you can describe implications of financial probity
- evidence that you can outline the critical dates/initiatives that will require or generate resources
- evidence that you have provided for additional items (as necessary and appropriate) in the budget
- evidence that you have recommended new or modified internal controls that could improve risk management and maintenance of audit trails
- evidence that you have developed an annual budget, as appropriate
- evidence that you have developed appropriate budget notes
- evidence that you have responded appropriately to the questions presented by ‘Jim Schnieder', the CEO in the case study in this assessment task.

Adjustment for distance-based learners

This test can be adjusted for distance learners. Options include:
Option 1: Submit test as a report
Procedure:
- no variation of the task is required
- follow-up interview may be required (at the discretion of the assessor)
- documentation can be submitted electronically or paper-based.
Option 2: Conduct test as an interview
This option involves holding an interview with the candidate on Skype or by telephone.
Procedure:
- the assessor will schedule a date for the interview
- the assessor will make contact with the learner and commence the interview
- supplementary information or a follow-up interview may be required (at the discretion of the assessor).

Scenario
The CEO of Houzit Pty Ltd, Jim Schnieder explained that he prefers to discuss the budgets with all senior managers prior to their distribution in order to ensure a corporate view of the strategic plans. He then meets with each group separately to answer questions and concerns about their particular area. Eventually the budgets will be printed in hard copy and bound as well distributed as an electronic spreadsheet.
Upon completion of the budgets you meet with Jim to provide an overview of the information contained within the budgets, the budget notes and recommendations regarding the internal controls to prepare him for the meetings with the senior managers. To clarify his understanding of the information, Jim asks you a series of questions (listed below, which you will complete written or orally as agreed with your assessor).

Prompt questions
Based on the information provided in the case study answer the following questions in the space provided below:

1. Identify the current statutory requirements for tax compliance and list and calculate the tax liabilities for Houzit Pty Ltd under taxation legislation.

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

3. 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.

4. 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.

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

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

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

8. 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- Monitor andreview budget

Performance objective
This assessment task requires you to monitor the implementation of a budget and report on the variances, trends and performance of the established budget for a fictional business and provide recommendations for ongoing financial viability.

Assessment description
You will need to review the provided current case study information and compare it to the budget you established in Assessment Task 1.After evaluating these you will need to report on the following:
- significant issues
- variances from budget
- comparative performances
- recommendations for ongoing financial viability
- evaluation of financial management processes.
Procedure
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 in a report:
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 issues 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.
5. Prepare for and undertake the role-play presentation:
a. Arrange a time with Jim Schnieder, CEO of Houzit Pty Ltd (your assessor), to present an oral explanation of your variance report. Ensure that your assessor has copies of or access to documents you will be referring to.
b. Deliver the presentation of your variance report
i. Summarise your findings (issues, variances, financial performance)
ii. Prioritise and present your recommendations.
c. Ask for questions, either during or at the end of the presentation, to:
i. demonstrate your oral communication skills
ii. use questioning and listening techniques
iii. demonstrate competent exchange of information
iv. use appropriate conventions and protocols
v. ensure the manager/CEO is clear about budgets
d. Seek approval (or discuss as required) of your recommendations in the report.

Specifications
You must submit:
- a complete actual-to-budget variance report
- a completed report detailing the issues, variances, performance, recommendations and evaluations identified from the financial information for Houzit Pty Ltd.
Your assessor will be looking for:
- Evidence that you reviewed the provided case study information to develop an evaluative report concerning the progress of the budget.
Adjustment for distance-based learners
- No changes to the task are required.

Attachment:- Assessment Tasks.zip