Issues Of Compliance: KPMG

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Question :

written activity (1000 words)

Your task is to research a financial services organisation (this can be one you work in or one you are familiar with) and discuss each of the following in relation to that organisation and their compliance issues:

  1. Disclosure of capacity criteria
  2. Duty of care principles
  3. General obligations of a financial services officer
  4. Laws of principal and agents
  5. Organisation's products and services
  6. Relevant agency agreements or broker authority
  7. Relevant industry codes of practice
  8. Relevant regulation pertaining to the financial services industry sector
  9. Statutory records a financial services organisation needs to maintain
  10. Fiduciary duties
  11. Contract law principles
  12. The internal monitoring or audit process

Research Task and Written/Oral Questions (50 words each) 

The following questions may be answered verbally with your assessor or you may write down your answers. Please discuss this with your assessor before you commence. Short Answers are required which is approximately 4 typed lines = 50 words, or 5 lines of handwritten text.

Your assessor will take down dot points as a minimum if you choose to answer them verbally.

Answer the following questions either verbally with your assessor or in writing.

  1. What types of documents can be considered source documents? List at least 6.
  2. What types of organisational tasks might you have to perform in regards to legal principles and regulatory requirements?
  3. When there are changes to legislation and regulations governing your service, what should you do?
  4. What are the benefits of an operational review?
  5. What codes of practice are relevant to the financial services industry?
  6. What is the purpose of a code of practice?
  7. What types of records must be kept by a financial service organisation?
  8. What do ASIC look at in relation to training for staff members?
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Answer :

FNSFMK505 Comply with financial services regulation and industry codes of practice

written activity

The chosen Australian based financial organisation that is selected in this particular context of study is KPMG. On the basis of the operations of the business, there are certain issues of compliance which would be discussed in parts in the following study which are portrayed. 

  1. Disclosure of capacity criteria 

As per the legislative frameworks in this particular scenario of study the definite sections of 1 to 5 mainly reflects the various set of disclosures for International Financial Reporting Standards (IFRS) for financial business firm KPMG. The requirements of disclosures are  assessed based on the standards that are comprised in the development of the effective reporting standards. Moreover, the disclosure of capacity criterion for the company are entirely dependent and are at par with the codes of practices that have been followed in this aspect. A greater importance lie on the requirements that have been set by the organisation mainly the legislative compliance and the concerns of the clients. However, the obligations for the disclosure are mostly applied to the financial service provider of KPMG.

The broker and the dealer or the municipal securities mainly engages in the submission of the sole underwriter. Additionally, the relevant requirement of legislation along with that of the codes of the practices mainly ascertains the Australian Securities Investment Commission (ASIC).

In context of KPMG Australia, the methods for disclosure of capacity to clients will include the address and name of the adviser who are registered. Moreover, the means of the remuneration for the adviser are analysed. In simpler terms, the statement for disclosure of capacity to client will mainly be consisting of the statement whether the adviser is given credit for providing advices or sell on the different ranges of the loan products. 

  2. Duty of care principles 

As per the guidelines that are laid down in the annual report of KPMG, the principles for duty of care are very much relatable with that of the management of the risks effectively and efficiently. The affair of risk management has been considered as the major force for maintenance of the welfare of its employees along with that of the Duty of care. 

In the general sense, the active business organisations must comply with that of principles of duty of care to their various employees. As a matter of fact, the organisations must meet the principles of duty of care for the betterment of their respective employees. Along with that, the legal responsibilities are directly linked with social security, laws of employment and compliance of data. Moreover, the use of innovative technology has been providing a platform for KPMG for fulfilling the principles of duty of care.

3.  General obligations of a financial services officer

In accordance to the rules and regulations that are laid down by ASIC and AFS with context to KPMG, the general obligations which are ascertained by the financial services officer are underlined as below:

  1. Financial requirements that includes the solvency along with the cash.
  2. Creating managers who are highly responsible
  3. Proper management of the conflicts that may arise in the organisation
  4. Risk management along with that of the compliance factors 
  5. Providing proper training, supervision and monitoring of the employees (Hanlon and Taylor, 2015). 

4. Laws of principles and agent

Generally, the various principles and agent mainly determine the relations between themselves in relation to the organisation of KPMG. There exists a definite positive relationship between the agents and principles that can help in upgrading the agency agreement of an organisation.  

5. Products and services of KPMG

KPMG mainly provides/offers assistance and services for the various financial orgnisations and the services industry. The company has got an expert team of IT and tax professions who are involved in transfer pricing, cross border taxation and proper management of complicated tax challenges in context to mergers and acquisitions. Apart from that, the services that are mostly on offer in case of KPMG involves market leading and data leading procedures. These help in developing marketing strategies which can help in providing improved results for the businesses (, 2018)

6. Relevant agency agreements or broker authority

The authority of the broker has underlined agency agreements, which has provided authority agreements .For this, the definite skills of the people are incorporated. Along with that, there are considerable risks in ascertaining the agency agreements.    

7. Relevant industry code of practices

The definite code of practices that are underlined for the financial sector mainly guarantees the fact of delivery of sound quality services to the prospective customers. Moreover, the global code of conduct that are applied for KPMG mainly defines the ethical code of conduct that are in compliance with that the provision of the high quality services. This will help  in enhancing professionalism (Burdon, 2016).    

8. Regulations that are pertaining to the industry sector of financial services

The financial organisation KPMG mainly formulates the statutory requirements with a basic aim of ascertaining the process of book keeping and compliance with the statutory accounting services standards. This regulation can help in derailing the finance service industries in context to KPMG that which has been taken in this respect (Chan et al. 2018).    

9. Statutory records 

The statutory records entail the various aspects of the structure and operations that mainly assess the financial implications of the businesses. Moreover, the statutory records are mostly kept up to date in order to meet the needs of the requirements of the shareholders (, 2018)

10. Fiduciary duties

The various aspects of fiduciary duties refers to different set of particular legal obligation in order to act as per the best interests of some other party. Thus, a proper relationship is created out of greater trust and confidence to act for the benefit of the other party. Henceforth, the parameters of duty of care and duty of loyalty seems to be the  component of fiduciary duties (Hemmings and Park, 2017).  

11. Contract law principles

The normal principles which are laid down by the principles of Australian Contract Law y maintains adherence for the various requirements that are dealt which are underlined as follows:

  1. Agreement
  2. Consideration 
  3. Intention
  4. Legality 
  5. Genuine consent and capacity 

12. Internal monitoring/audit process

With reference to the organisational procedures of KPMG, the procedure of auditing for KPMG underpins the auditing procedure. For this, there involves greater level of communication.  Along with that, application of definite technological aspects are analysed for KPMG. Moreover, the qualities of independence and integrity are also determined in this particular segment of study (Hossain, 2017).  

Research Task and Written/Oral Questions

1. What types of documents can be considered source documents? List at least 6.

 The various implications of source documents  mainly takes into account the definite aspects of the original system of records which are evident enough to provide details of the transactions that are ascertained in the system of accounting. Thus, the six different categories of source documents are analysed as follows:

  • Invoice and bill
  • Cash Memo
  • Receipt
  • Pay in Slip
  • Debit Note
  • Credit Note

2. What types of organisational tasks might you have to perform in regards to legal principles and regulatory requirements?

The management of an organisation must play an important role when it comes to maintaining compliance with that of the regulatory and legal requirements for its betterment in the future. For the legal requirements, the parameters that are to be considered for meeting the legal ascertainment’s are:

  • Charity Finance and accounting
  • Legislation of equality
  • Health and safety 

For initiating the regulatory requirements, the organisational members must ensure that the protocols are formulated as per the sound corporate governance principles. To fulfill the various legal requirements, there must be maximisation of tax return and at the same time minimisation of the bill for taxation (Christopher, 2018).  

3.  When there are changes to legislation and regulations governing your service, what should you do?

As per the varied needs and requirements of the businesses, if there are changes that are subjected to regulation and modifications that are related with that of the services, then it is necessary to changes the rules and protocols of the firm accordingly (Christopher, 2018)

4.  What are the benefits of an operational review?

The various benefit of an operational review mainly objects to assist the organisation to learn the various implications for dealing with the problems and at the same time addressing the issues accordingly (Majumder and Fangaria, 2015). There may be challenges that are associated with that of the growths and changes in regulations of the company. Thus, the major benefit of an operational review provides realistic solutions when it comes to ascertaining the financial and operational implications. It enables to assess the various strengths, opportunities, weaknesses and threats that are related with that of the internal procedures of the organisation (, 2018).   

5. What codes of practice are relevant to the financial services industry?

The various codes of practices and conduct that are assessed in the domain of financial services as regulated by ASIC are determined as:

  • The Code of Banking Practice 
  • Consumer Credit Code
  • The ePayments Code
  • Account Switching Code of Practice 
  • Credit Reporting Code of Practice which is proposed

6. What is the purpose of a code of practice?

The sole purpose of code of practice that is set for various industry standards mainly ascertains the definite set of rules, regulations and guidelines which can promote fair degree of dealing with that of the business and their prospective clients. Apart from that, it enforces fair laws of trading which are quite flexible in nature and response as per the dynamic needs of the customers. In other words, the code of conduct generally provides a minimum standard that can provide adequate protection to the customers. 

7.  What types of records must be kept by a financial service organisation?

 The records that are to be maintained by the financial organisations are:

  • Accounting records that are basic in nature
  • Records of expenses and depreciation
  • Records for sales 
  • Details for the opening stock balance and listing out the creditors and debtors 
  • Various set of agreements. 

What do ASIC look at in relation to training for staff members?

The ASIC mainly aims to look for employees who are quite flexible, maintaining an ethnic culture and diversity in work and at the same time quite transparent. This will help to grab the stuffs that are mainly taught at the time of training and development process of the employees and staffs.