Topic 7: Electronic Processing, Accounting Assocations

Question 1

What are the 5 principles of the Professional Accounting Code of Conduct?

Answer 1

• Integrity
• Objectivity
• Professional Competence and Due Care
• Confidentiality
• Professional Behaviour

Question 2

What is the definition of Integrity?

Answer 2

Honesty and straightforwardness in professional and business relationships.

Question 3

What is definition of Objectivity?

Answer 3

Avoiding the impact of biases on your judgement, decision making or allowing undue influence on others or yourself.

Question 4

What is the definition of Professional Competence and Due Care?

Answer 4

Maintaining professional knowledge and skills at the standard expected by a member of the public when seeking professional advice, or the standard work and output by an employer.

Question 5

What is the definition of Confidentiality?

Answer 5

Respecting the right of your clients and employer to have personal details and information kept secure, private and confidential.

Question 6

What is the definition of Professional Behaviour?

Answer 6

Complying with laws and regulations relevant to where you live and not behaving in a way that reflects badly on you, your business or employer and the profession.

Question 7

What are the 5 types of Electronic Processing Methods?

Answer 7

• EFTPOS
• Electronic Bill Payment
• Credit Cards
• Online Banking
• Direct Debit

Question 8

Describe the Electronic Processing Method “EFTPOS”

Answer 8

A system where businesses, particularly shops, can make sales and receive cash immediately for goods or services sold without the customer having to use actual cash.

Question 9

What are 3 Benefits of “EFTPOS”?

Answer 9

• Potential increase in sales as customers who are not carrying sufficient cash can still make purchases
• Improved cash inflow by receiving cash immediately from the sale rather than having to set up an accounts receivable ledger account
• Reduction in costs as there is no need to set up and operate an accounts receivable ledger system

Question 10

What are 3 Risks of “EFTPOS”?

Answer 10

• Initial establishment cost of setting up the system with the trader’s own bank
• Ongoing service charges
• Potential for fraudulent use of cards’ liability for losses may be shared by both the store and the access card provider

Question 11

Describe the Electronic Processing Method “Electronic Bill Payment”

Answer 11

A system where agencies accept payment from customers on behalf of another business. The customer makes the payment at the approved agency, which then transmits the amount paid to the business that provided the goods or service.

Question 12

What are 3 Benefits of “Electronic Bill Payment”

Answer 12

• Lower operating costs as business or the warehouse/dispatch can be located in non retail areas
• No loss of stock from customer or employee theft
• All information and pricing can be easily updated online

Question 13

What is 1 Risks of “Electronic Bill Payment”

Answer 13

• Possibility that losses caused by fraudulent purchasers may not be fully recoverable from the card provider

Question 14

Describe the Electronic Processing Method “Credit Cards”

Answer 14

A system used by banks and other organisations to people and businesses to enable them to pay for goods and services without having to use physical cash.

Question 15

What are 2 Benefits of “Credit Cards”

Answer 15

• Capacity to borrow small amounts of money to make purchases without having to apply for a loan
• A record of the transactions made appears on the customer’s credit card statement

Question 16

What are 3 Risks of “Credit Cards”

Answer 16

• Initial establishment cost of setting up the system with the trader’s own bank
• Ongoing service charges
• Potential for fraudulent use of cards’ liability for losses may be shared by both the store and the access card provider

Question 17

Describe the Electronic Processing Method “Online Banking”

Answer 17

Individuals and businesses can arrange with their banks and other financial institutions to conduct banking transactions via the internet.

Question 18

What are 3 Benefits of “Online Banking”

Answer 18

• reduced costs because less staff are needed to conduct the transactions
• potential to have fewer branches situated in highly visible locations
• reduced processing, printing and mailing costs of bank statements

Question 19

What are 3 Risks of “Online Banking”

Answer 19

• potential for loss of personal and financial information
• potential for interference from hackers
• loss of function due to power outages

Question 20

Describe the Electronic Processing Method “Direct Debit”

Answer 20

Individuals can instruct their banks to make regular payments from their bank account to another business.

Question 21

What are 3 Benefits of “Direct Debit”

Answer 21

• it ensures receipt of regular amounts owing on time
• it is safer as less cash is held on the premises and reduced time is needed to make bank deposits
• documentation of all transactions can be verified through banking records

Question 22

What are 2 Risks of “Direct Debit”

Answer 22

• inadequate funds in their account mean the bank will not make the payment due on time
• a stop payment order to the bank must be made to ensure the bank does not continue making payments

Question 23

What is the role and influence of CPA Australia?

Answer 23

CPA Australia is a professional accounting body founded in Australia with over 170,000 members working across 150 countries and regions. The association provides all members with services such as education, training, technical support and advocacy. Employees/members work together with other international or local bodies to help represent the views and concerns of the profession to governments, industries regulators, academia and general public.

Question 24

What is the role and influence of Chartered Accountants Australia and New Zealand?

Answer 24

CA ANZ is a body representing more than 130,000 financial professionals, in supporting them to make a difference to the various businesses, communities and organisations in which they work/live. It promotes high ethical standards and the Chartered Accountant designation, whilst delivering world-class services and life-long education to members/advocates for the public good.

Question 25

What is the role and influence of the Institute of Public Accountants?

Answer 25

The Institute of Public Accountants is a professional body represents 40,000 members and students working in various industries or practices such as commerce, government or academia. The institute counsels and advises small businesses to support their productivity, growth and prosperity whilst also providing opportunities to members for professional development and/or education.

Question 26

What is the role and influence of the Financial Planning Association of Australia Limited?

Answer 26

The FAAA provides professional association for the financial advice profession whilst also advocating for the interests of financial advisers/clients. Members of the FAAA have access to a range of professional development opportunities and networking events with other resources that will help them stay up-to-date with industry trends and regulations.