Employees working within the Finance Industry are expected to abide by a variety of stipulations such as legislation, codes of practice, and policies/procedures, that ensure consumers (customers/clients) receive high-quality services, advice and can be assured that their information will be securely stored. There are also other laws that protect the rights of an employee, these regulations must be followed by the employer/workplace. This broad collection of stipulations is known as Workplace Governance.
There are three levels of Government in Australia:
- Federal: Responsible for developing national policy and legislation, providing national services such as Australia Post, protecting Australia's security and defence, and representing Australia overseas.
- State/Territory: Responsible for state/territory policy and legislation and providing state/territory services such as police and state schools.
- Local: Responsible for local council policy and regulation and providing local services such as garbage collection.
One of the main responsibilities of Government is to implement and administer pieces of legislation, known as Acts. Acts can either be administered at the Federal or the State Government level. Acts are further supported by Regulations and Industry Codes of Practice. At the workplace level, there are Codes of Conduct and Policies and Procedures which ensure that employees of individual workplaces conduct themselves in an appropriate manner and individual tasks are competently performed.
- Acts: Formal descriptions of laws (legislation) created by Parliament (Federal or State). Enforceable by the judicial system (police/courts).
- Regulations: Specific guidelines on how to apply the laws contained in an Act. Not usually enforceable by law in their own right.
- Industry Codes of Practice: Developed by industry associations. Best practice guidelines for the industry. Usually linked to membership or registration and may be audited.
- Workplace Code of Conduct: Specific to individual workplaces. Outlines ethical work practices (professional ethics), values, accountability, standards of conduct and practice, disciplinary actions. Can also include the business Vision and Mission.
- Policies and Procedures: Provides employees with guidelines on completing tasks.
This Act promotes and protects the privacy of individuals and also regulates how Australian Government agencies and organisations with an annual turnover of more than $3 million handle personal information. Personal Information is defined as any information or opinion that identifies an individual. This includes information that could be reasonably used to identify someone, such as:
- Names
- Birth dates
- Addresses
- Telephone numbers
- Medical history
- Family details
To view or download a copy of the Privacy Act 1988 click here.
Businesses are also subject to the obligations identified in the Australian Privacy Principles or APPs. The APPs are generally applicable to entities that hold personal information. Those businesses covered by the Privacy Act 1988 are subject to the obligations set in APPs.
The thirteen (13) Australian Privacy Principles (APPs) set out the ways how private sector organisations should collect, use, secure and disclose personal information and they are as follows:
- Open and transparent management of personal information
- Anonymity and pseudonymity
- Collection of solicited personal information
- Dealing with unsolicited personal information
- Notification of the collection of personal information
- Use and disclosure of personal information
- Direct marketing
- Cross-border disclosure of personal information
- Adoption, use or disclosure of government related identifiers
- Quality of personal information
- Security of personal information
- Access to personal information
- Correction of personal information.
Bookkeepers and BAS agents must take note to collect and use the personal information of customers only for relevant purposes, and ensure that any information regarding private details should not be disclosed to any third party without permission. They should also have policies in place for the proper management of personal information, to restrict access to any records containing client information, and the verification of the accuracy of personal information.
This Act falls with the broader category of Australian Consumer Law (ACL). ACL applies to all goods and services traded in Australia. A Consumer is defined as anyone who acquires goods and services that are:
- Priced at LESS than $40,000.
- Priced at MORE than $40,000 if such goods and/or services are used for personal, domestic, or household use or consumption.
- A vehicle or trailer purchased principally for the transport of goods on public roads.
Individuals are still considered consumers even if the goods they have purchased are intended to be re-sold or re-purposed for other trade or commerce.
The main protections for consumers that this Act provides are:
- Protection from misleading and deceptive conduct in trade or commerce.
- Protection from unconscionable conduct. For example, the use of extremely small font size for important terms and conditions or intentionally hiding/burying important information or clauses within a contract is easily overlooked.
- Protection against unfair contract terms in consumer contracts. A term is considered unfair if it causes a significant imbalance in the parties rights and obligations that are not reasonably considered necessary to protect the rights of the supplier.
To view or download a copy of the Competition and Consumer Act 2010 click here.
The Act is administered and enforced by the Australian Competition and Consumer Commission (ACCC) and various State/Territory consumer protection agencies. The Australian Securities and Investment Commission (ASIC) is also involved in administering financial services matters.
Other Acts which relate to Australian Consumer Law include:
- The Corporations Act (2001)
- Insurance Control Act (1984)
- National Consumer Credit Protection Act (2009)
This oversees the rights of the owner or licensee of literacy, artistic or dramatic work. Approval from the author or creator of the information or product may be needed before these products can be accessed or utilised in certain contexts. This is quite a complex law, dealing with information that is used and how it should be referenced appropriately or have approval from the original source.
To view or download a copy of the Copyright Act 1968 click here.
This Act was created to recognise the importance of the information contained in the rising use of electronic transactions including the need for its confidentiality.
The Act ensures that a transaction under a Commonwealth law will not be invalid simply because it was conducted through electronic communication.
If a Commonwealth law requires an individual to:
- Give information in writing
- Provide a handwritten signature
- Produce a document in material form
- Record or retain information
The Electronic Transactions Act means these tasks can now be completed and/or lodged electronically.
To view or download a copy of the Electronic Transactions Act 1999 click here.
This Act provides the public with access to official documentation from government bodies and agencies. There are limits or exemptions to public access, for example:
- Documents detailing Cabinet deliberations or decisions.
- Documents detailing trade secrets.
- Documents that could damage national security.
- Defence documents.
- Documents which could damage International or Commonwealth/state relations.
To view or download a copy of the Freedom of Information Act 1982 click here.
This Act provides consumers and other interested parties with a central register for businesses in Australia. It identifies the controlling entity behind the business name as well as provides contact information for this entity.
It may be the responsibility of the Accountant or Bookkeeper to ensure that the business is correctly registered with the appropriate authorities.
To view or download a copy of the Business Names Registration Act 2011 click here.
Registered business names can be searched via the Australian Securities & Investments Commission (ASIC) Connect Database.
Computer-based crimes, including those involving a cloud service, is known as cybercrimes. This may include offences such as hacking, distribution of malware, fraud and others. The following legislation Acts refer or relate to this topic:
- Criminal Code Act 1995
- Telecommunications Act of 1997
- Australian Security Intelligence Organisation Act 1979
- Cybercrime Act 2001
- Crimes Act 1914
The Government may be able to access information for the purposes of cybercrime law enforcement or national security. A warrant, issued by a court or tribunal, is usually required.
Accountants deal with confidential financial details of individuals and businesses or organisations. They have the ability and control in recording financial transactions or in manipulating these records for whoever may gain from it. This is why an established code of ethics governs this profession.
Each profession has its own ethical codes which state the fundamental principles professionals should abide by to improve their professional behaviour; maintain public trust and confidentiality; demonstrate integrity, objectivity, and fairness.
One of the key traits of an accountant is adherence to ethical guidelines which also includes strict compliance to guidelines, laws and regulations that govern their area and field of work. Particular to this field are the key provisions of relevant legislation, regulations, standards, and Code of Practice that may affect the preparation of financial reports. Some of which are outlined below:
Organisations registered for Goods and Services Tax (GST) and/or registered as an employer must report their GST amounts and employee PAYG deductions to the Australian Taxation Office (ATO) on the organisation’s Business Activity Statement (BAS).
When a contract bookkeeper provides services relating to the BAS for a fee or rewards the Tax Agent Services Act 2009 (TASA 2009) requires the bookkeeper to be registered with the Tax Practitioners Board (TPB). In additions to the registration of tax agents, the TPB is also responsible for ensuring compliance with other sections of the Tax Agent Services Act 2009 (Cth) (TASA) as well as the Code of Professional Conduct (see ethical principles and practices below).
BAS services include the calculation of BAS liabilities, entitlements and obligations and representing an organisation for its BAS activities with the ATO. If a bookkeeper is not registered a penalty may be imposed under the civil penalty provisions of the TASA 2009. In addition, contract bookkeepers are required under the provisions of the TASA 2009 to hold professional indemnity insurance.
To view or download a copy of this legislation click here.
Organisations with a turnover of $75 000 or more, or not-for-profit organisations with a minimum turnover of $150 000, must register for the Goods and Services Tax (GST) and apply a 10% tax to goods and services deemed ‘taxable supply’.
The tax collected must be reported and remitted to the ATO by the due dates stipulated in the legislation. When an organisation incurs GST on its acquisitions it is able to claim the GST paid as a tax credit, thereby reducing the amount it owes to the ATO.
As bookkeepers are an integral part of the recording function in the accounting system, it is imperative they apply GST to transactions in accordance with the regulations and that they keep up to date with changes in GST legislation. The ATO informs registered organisations of changes to the legislation. In addition, the bookkeeper is able to access up-to-date information relating to the GST by searching for ‘GST’ on the ATO website.
To view or download a copy of this legislation click here.
Under the Pay As You Go (PAYG) system, employers are required to withhold income tax from wages, salaries and payments to employees, directors and others and must forward the tax withheld to the ATO.
In addition, employers must issue employees with a pay advice for each payment, issue payment summaries to employees and report to the ATO on withholding payments deducted during the financial year. In some organisations, the bookkeeper is responsible for administering the payroll system and as a result he or she must be aware of the employer’s responsibilities under the PAYG system and relevant compliance requirements.
To view or download a copy of this legislation click here.
The Superannuation Guarantee (Administration) Act 1992 established compulsory employment based superannuation under which employers are required to provide a minimum level of superannuation support for employees who meet certain employment conditions.
This is referred to as the Superannuation Guarantee. Employers are currently required to contribute 10.00% of earnings towards an employee’s chosen superannuation fund. As a result of this legislation, bookkeepers responsible for maintaining an organisation’s payroll system will need to comply with the recording, disclosure, and reporting provisions of the Act.
To view or download a copy of this legislation click here.
Fringe Benefits Tax (FBT) distinguishes the tax payable by employers on benefits provided to employees or associates of employees, in respect of the employee's employment. The definition of employee includes former, current, and future employees. This tax is also applied to benefits provided by an associate of an employer or by a third party under an arrangement with the employer.
The definition of a fringe benefit specifically excludes, amongst other things, the following:
- a payment of salary or wages
- the provision of exempt benefits
- a payment of superannuation to a complying fund for an employee
- an employment termination payment.
Liability for FBT is assessed on an annual basis, with the FBT year beginning 1 April and ending 31 March. The rate of tax may vary from year to year. The current rate of FBT is 47% (equivalent to the top individual marginal tax rate plus the Medicare levy) of the aggregate of the grossed-up taxable values of fringe benefits provided by the employer.
For more information about Fringe Benefits, click this link: Fringe Benefits Tax Assessment Act
The Income Tax Assessment Act mandates individuals and companies, and some other entities to pay income tax. Income tax is to be paid each financial year or income year which is computed as Income Tax = (Taxable Income x Rate) - Tax offsets.
The Method Statement for Income or financial year is as follows:
- Calculate taxable income for the income year.
- Calculate basic income tax liability on taxable income using: a. the income tax rate or rates that applies for the income year. b. any special provisions that applies to work out the liability.
- Calculate tax offsets for the income year. Tax offset reduces the amount of income tax to be paid.
- Subtract tax offsets from the basic income tax liability. The result would be the income tax that should be paid for the income year or financial year.
Some entities may work out some or all of their income tax for the financial year by referencing to something other than their taxable income for the income year.
Here is the Australian income tax rates for 2020/21 (Residents)| Income Thresholds | Rate | Tax Payable on this Income |
|---|---|---|
| $0 – $18,200 | 0% | Nil |
| $18,201 – $45,000 | 19% | 19c for each $1 over $18,200 |
| $45,001 – $120,000 | 32.5% | $5,092 plus 32.5c for each $1 over $45,000 |
| $120,001 – $180,000 | 37% | $29,467 plus 37c for each $1 over $120,000 |
| $180,001 and over | 45% | $51,667 plus 45c for each $1 over $180,000 |
To know more information on Income Tax Assessment, click this link: Income Tax Assessment Act
To know more information on Income Tax Rates, click this link: Income Tax Rates
The Taxation Administration Act provides general provision in relation to the administration and enforcement of the other tax laws which includes the imposition of tax and its payment; exceptions to and exemptions from liability to the tax; and entitlements to refunds.
Under general provisions, the Taxation Administration Act includes the following:
- The assessment and reassessment of tax liability; and
- Payment of tax, if this is not provided for in the tax law concerned; and
- Entitlements to and the obtaining of refunds of tax; and
- The imposition of interest and penalty tax; and
- Approval of special tax return arrangements; and
- The collection of tax; and
- Record keeping obligations of taxpayers and general offences; and
- Tax officers and their investigative powers and secrecy obligations; and
- Objections and appeals; and
- Cooperation with other jurisdictions in conducting investigations and enforcing tax laws; and (k) miscellaneous matters, for example, the service of documents, corporate criminal liability and evidence.
This Act also includes general provisions in relation to revenue measures for the purpose of providing an economic response to a COVID-19 emergency.
For more information on Taxation Administration, click this link: Taxation Administration Act
Bookkeepers need to ensure that the documents used in the accounting system are retained as evidence that transactions have occurred. These documents may be required by various government bodies when conducting audits into income tax, GST issues and/or the Superannuation Guarantee.
As a general rule, the retention period is 5 years, however, there are specific situations with different requirements. Refer to the information on the ATO's website for more detail. Records can be maintained in paper or digital format. If copies are made, they must be a true and clear copy of the original. It is highly recommended that a back-up of all digital records is kept.
Documents must be in English unless the expense is incurred outside Australia.
Examples of the types of financial records which must be retained are:
- Receipts and other evidence of all sales and purchases
- Tax invoices, wage, and salary records
- GST documents
- Records of the purchase, sale, and other costs of any business assets, such as land, buildings, or office equipment
- All records relating to tax returns, activity statements, fringe benefits tax (FBT) and employee superannuation contributions.
Consequently, all organisations should have a document retention and destruction policy to ensure compliance with various legislative requirements. This policy should:
- Identify the types of documents and records to be retained and the required retention period/s.
- Determine the method of retention, such as hard copy or electronic copy, ensure a secure method is selected (ie. locked filing cabinets, password protected files).
- Detail the file identification protocols (ie. by client surname then first name or initial or by date or by subject matter).
- Detail the document destruction methods (ie. shredding of hard copy documents, or permanent deletion of electronic data).
The ATO website provides assistance in the area of records management, for example:
- A software program titled: ‘Record keeping evaluation tool’ that assists organisations to identify documents that should be retained.
- A document titled ‘Record keeping for small business’.
- A document titled ‘Penalties for not keeping or retaining records’.
Work Health and Safety (WHS) – sometimes called Occupational Health and Safety (OH&S) – involves the management of risks to the health and safety of everyone in the workplace. This includes the health and safety of employees, contractors, customers, visitors and suppliers.
It may initially cost money and time to implement safe practices and install safety equipment but it is critical to the success of the business. Not taking action could also result in prosecution, fines, injuries, and loss of skilled staff.
Workers’ compensation laws also require businesses' to have some form of workers’ compensation insurance policy for employees. Click on this link to find out more about workers’ compensation insurance: Workers’ compensation insurance.
The following are the WHS Regulations applicable to each State and Territory in Australia:
| State/Territory | Regulation (click on each regulation title for details) |
Legislation Act |
|---|---|---|
| Queensland | WHS Regulation 2011 | Work Health and Safety Act 2011 |
| New South Wales | WHS Regulation 2017 | Work Health and Safety Act 2011 |
| Western Australia | OHS Regulations 1996 | Occupational Safety and Health Act 1984 |
| South Australia | WHS Regulations 2012 | Work Health and Safety Act 2012 |
| Tasmania | WHS Regulations 2012 | Work Health and Safety Act 2012 |
| Victoria | OHS Regulations 2017 | Occupational Health and Safety Act 2004 (OHS Act) |
| Northern Territory | WHS (National Uniform Legislation) Regulations | Work Health and Safety (National Uniform Legislation) Act 2011 |
| Australian Capital Territory | WHS Regulation 2011 | Work Health and Safety Act 2011 |
These regulations describe how to prevent or minimise risk in the workplace. This is particularly important in ensuring the safety of individuals who conduct banking transactions for their organisation.
Businesses in the financial and insurance services industry are largely covered by standard WHS regulations. If the business is located in an office building, health and safety precautions should include measures to prevent office-based injuries including psychological injury.
Organisations must provide procedures or guidelines on occupational health and safety for employees in compliance with the WHS Regulations and to prevent work-related incidents or injuries. A designated safety officer or the manager of the company should conduct an orientation for new employees to make them aware of these procedures and perform audits to ensure that procedures are adhered to.
Finance officers have the responsibility of processing transactions, both electronic and cash-based. These types of transactions create potential safety and security risks if not handled correctly. Here are the general safety and security measures for banking activities of a finance officer:
- For over-the-counter bank transactions:
- The cash handler or finance officer should have a varied schedule. This helps to reduce the risk of someone observing the banking schedule and planning an attack.
- Place cash in a secured non-descript bag before leaving the workplace or bank.
- When transferring or handling a large sum of cash, the finance officer should utilise the security of an armoured vehicle pick-up service.
- For online banking transactions:
- Always check and verify the website’s security features such as encryption of cardholder’s data or bank details before doing any type of online banking transaction.
- Only the authorised finance officer should conduct an online banking transaction.
- Always keep the online banking log-in details confidential.
- Ensure any websites or apps are logged out at the completion of the online banking activity.
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For some businesses that employ staff or contractors who are not office-based, there are other WHS requirements that may be relevant to the business including:
- Standards for protective clothing and equipment
- Standards for occupational safety signage
- Prevention of burns from hot liquids, surfaces or steam
- Driving safety
- Electrical safety.
Taxes in Australia are administered and collected by the Australian Taxation Office (ATO) and in some cases state government revenue offices. Businesses can save money by paying the correct amount on time and taking advantage of any tax concessions that they are entitled to.
The key taxes affecting businesses are Company (income) Tax, Capital Gains Tax (CGT) and the Goods and Services Tax (GST). These taxes are all set by the Australian Government.
Businesses can elect to make tax payments monthly, quarterly, or annually. Tax codes should be adhered to depending on the type of company.
Listed below are the tax codes that may relate to the business:
| Tax Code | Tax Code Description | Description |
|---|---|---|
| ABN | No ABN Withholding (Australian Business Number or ABN) |
ABN This code is used to record purchases from suppliers who do not have an ABN and are not registered to collect GST. Please note the default setting in MYOB is for 46.5% of the purchase order value and allocate it to a payable account. When using NO ABN tax type, ensure that they are tax exclusive. ABN: No ABN/TFN: 49% |
| CAP | Capital Purchase | This is a GST tax code, and it is used to record GST on Capital Purchases. It is similar to the GST code, but where the GST code is used to record the purchase of Capital Items (Assets). CAP: Goods & Services Tax: 10% |
| FRE | GST-Free (Goods and Services Tax-Free) |
This is the GST-free tax code. It is set to 0% and used to record GST-free purchases and sales FRE: Goods and Services Tax (Tax Type): 0% |
| GNR | GST Not Registered (Goods and Services Tax Not Registered) |
This is the GST not-registered code. It is to record purchases from suppliers who are not registered to collect GST but have an ABN. GNR: Input Taxed: 0% |
| GST | Goods & Services Tax | This is the goods and services tax code. It is used to record sales, purchases, cheques and deposits on which the business has either collected or paid GST. GST: Goods & Services Tax: 10% |
| ITS | Input Taxed Sales | This is for the sale of input taxed supplies, or supplies that don't include GST in the sale price, such as financial supplies, interest income and residential income ITS: Goods & Services Tax: 0% |
| N-T | No-Tax | This is the not-reportable tax code and is used to record transactions outside the GST net, such as cash transfers, payment of GST or PAYG N-T: Goods & Services Tax: 0% |
For more detailed information on Goods and Service Tax, click on this link: Good and Service Tax
Taxation laws impact business operations in aspects such as making business decisions, deciding how employees get paid, and financial accounting and reporting. For BAS preparation, it is essential that all amounts subjected to any type of taxation are declared and computed correctly.
Here are some examples of other relevant business taxations :
| Tax Type (click on each tax title for more information) | Description |
|---|---|
| Luxury car tax (LCT) |
Luxury car tax (LCT) is a tax on cars with a GST-inclusive value above the LCT threshold. This is imposed at the rate of 33% on the amount above the luxury car threshold, and paid by businesses that sell or import luxury cars (dealers), and also by individuals who import luxury cars. |
| Wine Equalisation Tax (WET) | The Wine Equalisation Tax (wine tax) is a value-based tax applying to wine consumed in Australia. It applies at a rate of 29 per cent to assessable dealings in wine which include wholesale sales, sales under quote and applications to own use. WET is a tax of 29% of the wholesale value of wine. It is generally only payable if you are registered or required to be registered for GST. |
| Fringe Benefits Tax (FBT) | Fringe benefits tax (FBT) is tax employer’s pay on certain benefits they provide to their employees – including their employees’ family or other associates. It was introduced as a tax on businesses that pay employees fringe benefits, such as cars and shares. Fringe benefits may be in addition to, or part of the employees’ salary or wages package. The fringe benefits tax year is from 1 April to 31 March. An employer can claim an income tax deduction for the cost of providing fringe benefits. |
| Fuel Tax Credits | Fuel tax credits provide businesses with a credit for the fuel tax (excise or customs duty) that's included in the price of fuel used in:
|
For more detailed information on taxes refer to the Australian Taxation Office website. Just click on this link: Australian Taxation Office
An accounting standard is a technical pronouncement that sets out the required accounting for particular types of transactions and events. The accounting requirements affect the preparation and presentation of an entity’s financial statements.
The Australian Accounting Standards Board (AASB)is responsible for the setting of accounting standards in Australia. The accounting standards apply to all entities regulated by the Corporations Act 2001. This includes public companies and large proprietary companies formed under corporations’ law, as well as managed investment schemes such as unit trusts.
This Act also ensures that the AASB standards have the force of law, for example:
- A company’s directors must ensure that its financial statements comply with accounting standards.
- Auditors of companies are required to state whether the accounts have been made out in accordance with accounting standards.
- Substantial penalties apply to company directors for non-compliance with the law.
Consequently, a bookkeeper who is employed by an organisation that falls within the definitions of Australian corporations’ law will need to ensure that the organisation’s financial affairs are accounted for in accordance with the requirements and standards of the AASB. The AASB website assists bookkeepers to maintain their knowledge of the Australian accounting standards and their developments.
Ethical conduct is doing what is right, good or fair in a specific situation. To demonstrate ethical conduct, one must first weigh all relevant data, findings, moral considerations (ethical values, standards, and obligations) before reaching a conclusion about what to do in specific situations or as a rule of practice.
Below are some basic ways an accountant and bookkeeper can demonstrate ethical conduct in their work:
- Ensure your client’s privacy
- Comply with relevant codes of conduct and practice
- Advertising true and accurate statements
- Disclosing the true standard of your services and the quality of services, and associated fees for the services offered
- Disclosing inability to meet obligations to the client
- Develop policies and procedures for conducting business that meet the relevant compliance requirements.
Ethical conduct is not just an expected behaviour; it is also mandated by the following:
- The Privacy Act
- Trade Practices Act
- Codes of Practice as formulated and overseen by various Government Departments, National Bodies, and Industry Associations.
Accountants and bookkeepers need to maintain professional conduct in all activities, including, recording transactions, organising accounting documentation and records, and preparing financial reports. This also applies when dealing with co-workers and owners and fulfilling compliance requirements or settling things with outside entities and customers.
Business ethics include:
- Honesty
- Reliability
- Respect for staff
- Respect for the community
- Respect for the environment
- Respect for the law
- Respect for trading partners
- Standards of accountability
- Taking due care
- Transparency.
Ethical conduct within an industry is usually governed by a Code of Conduct or a Code of Practice.
Accountants and Bookkeepers need to be aware of and generally adhere to the Industry Codes of Practice in line with their profession. There are two classifications of codes of practice:
The codes of practice provide a minimum standard of protection to consumers. They are prescribed as regulations under fair trading laws and can be enforced. They are regulated under Government departments, agencies, and/or national bodies. Examples of these types of organisations include the Australian Competition & Consumer Commission (ACCC) and the Tax Practitioners Board.
The Tax Practitioners Board has various Codes of Conduct that affect Accounting and Bookkeeping Industry personnel who providing tax advice and/or services.
- Code of Professional Conduct for Tax Agents
- Code of Professional Conduct for BAS Agents
- Code of Professional Conduct for Tax (Financial) Advisors
The Tax Practitioners Board policy on Continuing Professional Education (CPE) outlines the requirements on how registered members can meet their requirements related to professional development. This includes maintaining a record of evidence of the CPE that all registered Tax and BAS agents have completed.
Other mandatory codes of practice are in place for the following industries or services, these are governed by the ACCC and may impact on Accountants and Bookkeepers who are working for organisations within these industries:
- Dairy Farmers and Milk Processors.
- Electricity Retailers.
- Franchising Participants.
- Horticulture Growers and Traders.
- Suppliers for the Food and Grocery Industry.
- Port Terminal Access (for bulk wheat exports).
- Suppliers, distributors, and retails of petroleum.
- Food-based grocery retailers in regards to unit pricing of food items.
A form of industry self-regulation. They are usually sponsored by an industry association.
For example, an industry association may stipulate that to become a member of their organisation individuals must agree to follow their code of practice). Voluntary industry codes are usually flexible and can be altered quickly in response to changing industry/consumer needs.
CPA Australia is an example of an Industry Association that recognises and expects members to abide by a Voluntary Code. Known as the Code of Ethics for Professional Accountants it is issued by the Accounting Professional and Ethics Standards Board (APESB). This board is an independent national body that sets the code of ethics and professional standards with which accounting professionals who are members of Certified Practising Accountants Australia (CPA Australia), Chartered Accountants Australia and New Zealand (CA ANZ), and Institute of Public Accountants (IPA) must comply.
This code sets out fundamental principles of ethics for Members, reflecting the profession’s recognition of its public interest responsibility. These principles establish the standard of behaviour expected of a Member and can be used as a basis for creating workplace policies and procedures.
The five fundamental principles are:
- Integrity: Members are required to be straightforward and honest in all professional and business relationships.
- Objectivity: Members must not compromise professional or business judgement because of bias, conflict of interest or undue influence of others.
- Professional Competence and Due Care: Members must attain and maintain professional knowledge and skill at the level required to ensure that a client or employing organisation receives competent professional activities, based on current technical and professional standards and relevant legislation; and act diligently and in accordance with applicable technical and professional standards.
- Confidentiality: Members must respect the confidentiality of information acquired as a result of professional and business relationships.
- Professional Behaviour: Members must comply with relevant laws and regulations and avoid any conduct that the Member knows or should know might discredit the profession.
There is a broad range of sanctions that the Accounting Professional and Ethics Standards Board (APESB) may impose for non-compliance with the Code, ranging from issuing a written caution or an order to undergo training or work under supervision, through to termination of registration. They may also make an application to the Federal Court of Australia for a civil penalty order if any of their members are in breach of the mandatory codes of conduct as stipulated above (ie. Tax Agents, BAS Agents).
Other Voluntary Codes of Practice
An example of a Code of Practice that exists in a similar industry is The Code of Banking Practice by the Australian Bankers’ Association sets out the obligations and best practices that banks must adhere to when dealing with customers.
Every business, no matter how small or large it is, requires accounting and finance policies and procedures to create a strong management foundation.
Policies are statements that outline the principles and views of a business on each topic covered. Policies provide an overview of certain rules that you have in your business.
Procedures are clear and concise instructions on how to abide by the policy and detail the sequence of activities that are required to complete tasks.
The following must be considered when developing financial administration policies and procedures for an organisation:
- Asset purchasing: This policy provides guidelines for the purchase of goods, services, equipment and assets for the business.
- Authorising financial transactions: All finance transactions as noted in this policy are to be authorised by the noted authorised person prior to the transaction being undertaken. This includes payment of invoices, business credit card balances, movement of money between accounts, purchasing equipment and stock etc.
- Authorising new customers: All new customers to the business must be reviewed and accepted in accordance with this policy.
- Authorising new suppliers: All new suppliers to the business must be reviewed and accepted in accordance with this policy to ensure that the supplier service is aligned with the business objectives.
- Bank account policy: This policy sets out the requirements for use of bank accounts, including opening, closing authorisation, variations to terms and conditions, reconciliation of bank accounts and bank account transactions.
- Budgets: Policies and procedures must be put in place for creating a realistic budget for any business activity. Setting up a realistic budget allows you to predict the financial standing of the business. The following four phases must be part of the policies and procedures for budgeting:
- Budget formulation: This includes a budget forecasting and development policy and processes. This incorporates a commitment to best practices, collaboration with stakeholders, transparency, and accountability.
- Budget approval: Submit the budget to board or stakeholders for approval. If they have objections, either convince them to support the budget or make the requested changes and resubmit.
- Budget execution: Budget execution is the process by which the financial resources made available to an organisation or department are directed and controlled toward achieving the purposes and objects for which budgets were approved. The process involves compliance with both legal and administrative requirements, and adhering to the plan and timings of the budget cycle.
- Budget Review: Have procedures for a regular budget review to see how close actuals are to budget projections. If, say, there's an emergency requiring a cash fix, adjust the budget. If one or more departments is overspending, rein them in or cut spending elsewhere to balance it out.
- Business credit card use: This policy provides guidelines for the issue and use of business credit cards.
- Customer credit: The customer credit policy is primarily about managing the credit you give a customer and how you monitor their creditworthiness. This policy is to make sure a customer doesn’t get too far into debt with you without a payment plan being put into place or action taken for late payment.
- Debt collection: This policy provides guidelines for the collection of late payments from customers to minimise business exposure to debt.
- Establishing an accounting system: A cash accrual system or cash-accounting system must be established to allow the business to review and manage their financial activities, and to comply with their financial obligations.
- Petty cash: Petty cash should be used to pay for small business expenses up to a set maximum amount, usually up to $100, where payments through accounts payable or business credit card are not justified or appropriate.
- Stock management: A stock management policy provides guidelines for purchasing, receiving and maintaining stock. Assists in monitoring and managing the amount of stock within the business to ensure that there are suitable levels of stock available to customers at all times.
Policies and procedures are typically formed during strategic management meetings which involve the top level of the organisation. Its objective is typically to form policies, procedures or standards to meet the company's objectives.
The development process goes through the five stages which are:
- Policy planning and needs analysis: Encourage an open and proactive approach to identify issues and develop a policy to ensure the efficient use of resources. Take into consideration the triggers of a policy review or a new policy development. Identify the officers responsible for the policy, and the stakeholders that need to be consulted about the development of the draft policy and, where possible, those who participate in the consultative process invited to give feedback.
- Policy writing: Drafting the new policy or amending the existing policy in consultation with stakeholders is done using both the policy template and the procedure template prescribed by the organisation. Seek resources and training that are useful for policy writing.
- Policy ratification: The length of time allowed for ratification and consultation depends on the complexity of the policy and its audience. Depending on the extent of change, urgency and timing of the policy change, stakeholders are consulted and have the opportunity to comment on the draft policy.
- Procedure development: Define a logical sequence of steps and sub-steps to be followed during the development stage. Provide an overview of the procedure and identify prerequisite knowledge and skills, if any. Highlight any safety issues and other precautions.
- Policy and procedure review: It is essential to regularly or periodically review policies and procedures that are undertaken to ensure their continuing suitability, effectiveness, and relevance.
The use of electronic payment facilities in Australia is regulated and monitored by the Australian Securities and Investments Commission (ASIC) under the ePayments Code to protect all users of electronic payments. The Australian Securities and Investments Commission acts as the national corporate regulator of companies and financial services and enforce laws to protect Australian consumers, investors, and creditors.
The ePayments Code (formerly known as the Electronic Funds Transfer Code of Conduct) regulates consumer electronic payments, including ATM, EFTPOS and credit card transactions, online payments, Internet and mobile banking, and BPAY.
This Code plays an important role in the regulation of electronic payment facilities in Australia. It complements other regulatory requirements, including financial services and consumer credit licensing, advice, training and disclosure obligations under the Corporations Act 2001 and the National Consumer Credit Protection Act 2009.
This Code is a voluntary code of practice. Banks, credit unions, building societies and other providers of electronic payment facilities to consumers subscribe to this Code.
Subscribers must warrant that they will comply with this Code in the terms and conditions they give consumers. This means that compliance with this Code must be a term of the contract between the subscriber and each of its account or facility holders.
Subscribers to this code should do the following:
- Give consumers terms and conditions, information about changes to terms and conditions (such as fee increases), receipts and statements,
- Set out the rules for determining who pays for unauthorised transactions, and
- Establish a regime for recovering mistaken internet payments.
To view list of subscribers to ePayments Code, click the link: ePayments Code Subscribers
For more information about this code, click the link: ePayments Code
