Accounting in Australia

Submitted by sylvia.wong@up… on Sun, 03/06/2022 - 04:08

As we have started to see, Accounting in Australia has developed and been a part of society since the black-and-white era. Let’s now just see some critical information that has helped shape the world of Accounting in Australia.

Sub Topics

One of Australia’s earliest accountants remains one of the country’s greatest historical figures. John Macarthur arrived in Sydney in 1790, a military officer determined to prosper in the new colony.

Macarthur and his wife Elizabeth are famous for introducing merino sheep to Australia and he is cited as the father of the Australian wool industry, but it was Macarthur’s accounting skills that set him on his way. As one of the few people who knew how to prepare a statement of account, he gained insights into trends and the growth of commerce in the new colony.

Some big figures in the Accounting World of Australia include Sir Alexander Fitzgerald and Mary Addison Hamilton.

Sir Alexander Fitzgerald

Australia’s first schools taught accounting, with a school in Sydney opening in 1805 offering child pupils tuition in reading, writing, arithmetic and bookkeeping “according to the Italian mode” (double-entry bookkeeping).

Sir Alexander Fitzgerald was a pioneer in accounting education and was described as “the outstanding figure of his time in Australian accounting”.

Born in 1890, he entered the workforce as a clerk for a hardware merchant, but studied accounting and worked his up way up in the profession.

When the University of Melbourne introduced a commerce degree in 1925, he enrolled as a foundation student while also taking a job as an assistant lecturer in accounting.

Mary Addison Hamilton

In 1915 Mary Addison Hamilton was the first woman appointed to a professional accounting body anywhere in the Commonwealth, when the Institute of Accountants and Auditors of Western Australia, a precursor of CPA Australia, admitted her as a member. An outstanding student, she topped Fremantle Chamber of Commerce examinations and studied accountancy at night school.

Hamilton broke down the barriers to being recognised as a professional at a time when women were refused entry to many professional associations. She worked as a clerk for the WA Education Department but volunteered accountancy services as treasurer or auditor to many not-for-profit groups, including the Royal Lifesaving Society and Catholic Women’s League.

The Institute of Certified Bookkeepers (ICB) is the largest bookkeeping institute in the world. It promotes and maintains the standards of bookkeeping as a profession, through the establishment of expectations, relevant qualifications and the award of grades of membership that recognise academic attainment, working experience and expertise.

The Institute’s objectives are:

  • to promote bookkeeping as a profession
  • to enable bookkeeping to gain recognition as an integral part of the financial profession
  • to promote training in the principles of bookkeeping
  • to enable the achievement of a qualification
  • to improve the career prospects of its members

Consultation with the Government, employers, businesses, the profession itself and the industry have confirmed and amplified the Institute’s assessment of the need for qualified certified bookkeepers.

Businesses, both large and small, are fully supportive of the objectives of The Institute of Certified Bookkeepers.

ICB Australia

Bookkeepers helping Bookkeepers helping Business

ICB works to provide the most effective understanding of and consideration of all bookkeepers. ICB is the bookkeeper’s voice as the world around us continues to change.

Concept Statements

ICB promotes and maintains the standards of bookkeeping as a profession, through the establishment of expectations, relevant qualifications and the award of grades of membership that recognise academic attainment, working experience and expertise.

ICB is involved in many aspects of the industry. For example:

  • Tax Practitioners Board (TPB) is a Recognised Professional Association
  • Representing BAS Agents and Bookkeepers on the ATO TPSG (Australian Tax Practitioners Stewardship Group)
  • Membership of the Australian Tax Office BAS Agents Advisory Group (BASAAG)
  • Appointed Board member of the Business Registry Strategic Advisory Council
  • Member of Working Groups with the Australian Small Business & Family Enterprise Ombudsman (ASBFEO)

For more information, visit the ICB website.

CPA Australia

The current form of CPA Australia dates from 1952 when the Commonwealth Institute and Federal Institute merged to create the Australian Society of Accountants. In July 1990, the name changed to the Australian Society of Certified Practising Accountants. In April 2000, the name became CPA Australia.

The foundation membership of 45 was comprised of the 43 eligible acceptances plus John Pickering Dagnell and Robert McCaskie. Investigation of the minutes shows that the committee wrote to John Pickering Dagnell and Robert McCaskie after the 12 April 1886 meeting and requested each join as a fellow and founding father; both accepted and paid the fees. Ebenezer Cox, who was present at the inaugural meeting, was ineligible as he had not been in practice for long enough.

Registered Tax Agent

The Tax Practitioners Board (TPB) is a national body responsible for the registration and regulation of tax agents, BAS agents and tax (financial) advisers (collectively referred to as 'tax practitioners). The TPB is also responsible for ensuring compliance with the Tax Agent Services Act 2009 (TASA), including the Code of Professional Conduct (Code).

This is achieved by:

  • administering a system to register tax practitioners, ensuring they have the necessary competence and personal attributes
  • providing guidelines and information on relevant matters
  • investigating conduct that may breach the TASA, including non-compliance with the Code, and breaches of the civil penalty provisions
  • imposing administrative sanctions for non-compliance with the Code
  • applying to the Federal Court in relation to contraventions of the civil penalty provisions in the TASA.

The TPB consists of a Board and Chair appointed by the Treasurer and staff made available by the Commissioner of Taxation.

Accounting is the language of business
Warren Buffett

While some business owners prefer manual record-keeping systems, most businesses use an electronic record-keeping system — making it easier to capture information, generate reports and meet tax and legal reporting requirements.

There are a number of issues you should consider when setting up an electronic or manual record-keeping system, as each has certain advantages and limitations.

Before the revolution of technology and the innovations we have seen in the accounting and bookkeeping world, most smaller and stand-alone

Point of Difference Manual Accounting Accounting Software
Speed Recording financial transactions and retrieving them for report generation takes more time Accounting software saves a lot of time as it allows quick and seamless data entry, invoice preparation, generating reports etc
Accuracy The biggest challenge while maintaining accounts manually is human error and so the chances of getting accurate results become low Accounting software allows automated calculations which can provide accurate results
Automation You need to add, edit and recheck the data manually which becomes tedious in case there are too many transactions As calculations are done automatically it becomes easy to get results and come to a conclusion.
Integration The transaction affecting other departments within an organization needs to be recorded in multiple places Accounting software integrates other business processes like banking, marketing, taxation etc so a single data entry gets reflected in multiple reports.
Reporting It is ambiguous and time-consuming to retrieve data from different books and complete it as a report With a single click of the mouse or tap, customized reports can be generated in seconds
Auditing and Taxation With the growing complexities in auditing and taxation, it has just become next to impossible to complete these tasks manually in an accurate manner Accounting software allows automatic compliance testing of the transactions and filing returns based on accurate data
Backup It requires a lot of physical space to store the books and ledgers to maintain the backup The backup is stored in the computer automatically and so it becomes highly convenient
Security All the data is maintained in the books and ledgers which can be accessed by anyone and security can be compromised It requires a password to access confidential information and thus accounting software provides high-end security

 

Studies have shown that a lot of students are embarking on this field of study for various reasons. Some of these have been due to families running their own businesses and implementing their own accounting and bookkeeping as a cost and time-effective measure.

As well with the dawn of innovation and abundance of work opportunities, people who are getting out there developing and starting up their own business or “side hustle” have found the need to manage their own finances and identify their money and income. These people are called Entrepreneurs.

Entrepreneurs have become a symbol of independence and wealth, especially with the rise of reality television and television shows based around the concept of starting your own business and putting your ideas and products out to market.

What are Entrepreneurs and Entrepreneurship? Let’s explore these concepts and how they relate to this course.

The entrepreneur is defined as someone who has the ability and desire to establish, administer and succeed in a startup venture along with risk entitled to it, to make profits.

The best example of entrepreneurship is the starting of a new business venture. Entrepreneurs are often known as a source of new ideas or innovators and bring new ideas into the market by replacing old with new inventions.

4 Types of Entrepreneurship

These businesses may include small businesses such as beauty salons, hairdressing salons, grocery stores, travel agents, consultancies, and trades such as carpentry, plumbing, electrician, etc. These people run or own their own businesses and often would hire family members or local employees.
They attract investors who think and encourage people who think out of the box. The research focuses on scalable business and experimental models.
These huge companies have defined life-cycle. Most of these companies grow and sustain by offering new and innovative products that revolve around their main products.
This type of entrepreneurship focuses on producing products and services that resolve social needs and problems. Their only motto and goal is to work for society and not make any profits.

Characteristics of Entrepreneurship

Not all entrepreneurs are successful; there are definite characteristics that make entrepreneurship successful. A few of them are mentioned below:

Starting any new venture involves a considerable amount of failure risk. Therefore, an entrepreneur needs to be courageous and able to evaluate and take risks, which is an essential part of being an entrepreneur.
It should be highly innovative to generate new ideas, start a company and earn profits. Change can be the launching of a new product that is new to the market or a process that does the same thing but in a more efficient and economical way.
To be successful, the entrepreneur should have a clear vision of his new venture. However, to turn the idea into reality, a lot of resources and employees are required. Here, leadership quality is paramount because leaders impart and guide their employees towards the right path of success.
In a business, every circumstance can be an opportunity used for the benefit of a company. For example, Paytm recognised the gravity of demonetization and acknowledged the need for online transactions would be more, so it utilised the situation and expanded massively during this time.
An entrepreneur should be flexible and open to change according to the situation. To be on the top, a businessperson should be equipped to embrace change in a product and service, as and when needed.
A company owner should know the product offerings and also be aware of the latest trend in the market. It is essential to know if the available product or service meets the demands of the current market, or whether it is time to tweak it a little. Being accountable and then altering as needed is a vital part of entrepreneurship.

Importance of Entrepreneurship

Entrepreneurship generates employment. It provides an entry-level job, required for gaining experience and training for unskilled workers.
It is the hub of innovation that provides new product ventures, market, technology and quality of goods, etc., and increase the standard of living of people.
A society becomes greater if the employment base is large and diversified. It brings about changes in society and promotes facilities like higher expenditure on education, better sanitation, fewer slums, and a higher level of homeownership. Therefore, entrepreneurship assists the organisation towards a more stable and high quality of community life.
Entrepreneurship helps to improve the standard of living of a person by increasing income. The standard of living means, an increase in the consumption of various goods and services by a household for a particular period.
New products and services need to be researched and tested before launching in the market. Therefore, an entrepreneur also dispenses finance for research and development with research institutions and universities. This promotes research, general construction, and development in the economy.
Accounting – is possibly the most boring subject in the world. And also it could be the most confusing. But if you want to be rich, long term, it could be the most important subject.
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