Financial Services Professional Practices
The principles of professional practice are essential for financial sectors to understand financial sectors roles and responsibility. The purpose of this study is to understand the role of Accounting, Insurance, Banking and Financial Planning in business industries. Additionally, the present assignment has discussed the relevant legislation, codes and regulations of financial practices. Finally, this assignment has presented a discussion about industry and organisation security practices and internal administration system. This study has described the triple-bottom line and its effect on business legislative requirements.
The accounting sector helps business industries to management financial statements. Using the country based accounting standard this financial sector suggests relevant format for balance sheet statement, income statement and cash flow statement. In the opinion of Schaltegger & Burritt (2017), the business organisation has to maintain relevant financial statement format to present an acceptable annual report. Accounting sector helps to present a common business language in their statement so it can be understandable to stakeholders. Additionally, this sector helps to review all financial data to identify any type of frauds and errors in the annual report. Therefore, the responsibilities of accounting sector are identified audit risk, suggest relevant format and manage financial transactions.
Insurance
This sector helps the financial industries to reduce unnecessary loss due to any accidents. In case of sudden accidents such as fire, natural disaster and transport accidents business organisations can face huge loss. Management, insurance coverage can help the business industry to gain 50% to 60% of their loss in an accident. Therefore, the companies are able to maintain their financial performance from year to year. In accordance to Michalski (2018), insurance coverage helps a business to avoid market risks and sustain their position in the competitive market. Hence, the responsibility of Insurance sector is to provide relevant insurance policies for the financial industries.
Banking
Banking sector has an important role in case of financial industries. Based on the industries assets amount the bank provides loan to the industries during market or product development. Additionally, the banking sector provides investment services to small industries. According to Bai, Krishnamurthy & Weymuller (2018), bookkeeping services of bank helps the business industries to categorize their expenses. Based on that, the responsibilities of this sector are providing loan services, investment services and bookkeeping for the financial industries.
This sector helps the financial industries to manage their transaction and project future performance. Financial planning evaluates the current business progress of the industries and suggests a relevant budget plan. The budget statement forecast the industries future incomes and expenses. Additionally, the forecast helps to understand the sales growth rate in future. Hence, the business organisation is able to understand their selling capabilities. Financial forecast helps the business organisation to be prepared for any type of financial risks (Ba?ová et al., 2017). The responsibilities of financial planning are sales forecast, budget planning and financial risks forecast.
Insurance
The Insurance sector and financial planning sector can interact with each other in the financial industries. During a financial planning the industries are able to understand their risks in future. Moreover, the organisations can be prepared for uncertainty and risks for the future. Based on that, the financial industries can take relevant insurance policies to reduce their risks in the future. The opinions of Egan, Hortaçsu & Matvos (2017) reflect that insurance money can also help to reduce their unnecessary expenses in the budget statement. Therefore, the sales growth can increase in the business and the financial industries can maintain high business performance.
- a) Financial industries can collect approximately 50 to 60% of their loss from the insurance money. Therefore, the cash assets can increase in the business. The insurance money can help the organisations to expand their productivity. Therefore, the industries are able to sustain their position in the competitive market.
- b) These financial sectors can help the industries to reduce their potential market risks in the business. Additionally, with help of proper financial planning, the organisation is able to maintain high financial growth in the market. Hence, the cash assets can increase in the budget statement and market sales can grow from year to year.
The current interest rate of Australian banks is 1.5% (Ft, 2018). This interest rate has a huge impact on banking sector as the financial industries can receive loan benefits. The business organisations have to pay low interest money on their loan amount. Therefore, financial industries are capable to pay back their bank loan and maintain low cash expenses. This helps to reduce cash expenses and avoid financial risks. In addition to that, as stated by Rehan et al., (2015), high annual assets help the industries to reduce market liabilities in the market. Accordingly, financial industries are able to meet their short-term and long-term obligations.
In case of insurance sector, the value of Australian dollars effects highly as financial industries receive low amount money. In the international market, 1 Australian dollar equals 0.72 US dollars (Xe, 2018). Based on that, the international industries cannot be able to expand their financial performance in international market. As studied by Brounen, Koedijk & Pownall (2016), financial industries have to expand their capital amount in the international market to expand their business in the market. However, the current value of Australian dollar is low and international industries cannot collect high profit from Australian insurance policy. However, local financial organisations are able to gain profit from the insurance policies. Value of Australian dollar cannot have high impact on the local business industries. Based on relevant insurance policy the companies can collect approximately 60% profit in the business. Accordingly, the financial performance can increase from year to year.
In case of accounting sector, the employees have to understand the rules and regulation of Australian Accounting Standard Board (AASB). AASB rules have clearly mentioned the working practices and accounting format of financial statement. Collecting proper knowledge about the IFRS rules can help the sector to provide proper guidance to the financial institution. Additionally, the rules of AASB stated that the financial industries can take legal action on their employees in case they do not follow relevant standard. Disobeying the accounting standard can increase financial calculation errors. Hence, board of directors has to set a strict policy to follow AASB rules in their financial statement. In addition to that, Brandon & Jones (2015) stated that following triple-bottom line can help financial institution to improve their work practices. Additionally, financial industries can maintain Corporate Social Responsibilities based on triple-bottom line.
Banking
Basically, triple-bottom line measure financial industries social, economic and environmental impact in their business. The organisations are able to understand codes of business by using triple-bottom line. Therefore, the accounting industry can understand customers’ requirement and provide proper guidance regarding financial reporting. Based on that, accounting sector can gain stakeholders trust and attract more investors in the business. In the opinion of Gouchev et al., (2017), the triple-bottom line helps financial organisations to advance goal of sustainability in work practices. Therefore, the companies are able to follow relevant format of income statement, cash flow statement and balance sheet. Based on that, organisations can improve their services in the market. Accordingly, with help of Accounting sector financial industries can reduce number of frauds and mistakes in their financial statement.
Triple-bottom line helps to improve economic health of the organisations. Due to cost benefit analysis financial sectors are able to present a relevant business plan for the future. Hence, business organisations are able to expand their market share in Australia. This helps accounting sector to improve their goodwill in Australian market. As argued by Sarkis & Dhavale (2015), triple-bottom line ultimately leads to improve market share, improve employee motivation and reduce labour turnover in financial industries. Therefore, accounting sector can help to expand financial industries market reputation in international market.
Financial institution has to understand the importance of professional development and legislative requirement in the management. According to Golombek & Johnson (2017), a financial industry is able to meet their obligations based on advance professional development. Based on above discussion it is clear that other members of a work team can maintain the following steps to appraise their obligation.
- a) Leadership development:Using triple-bottom line can help financial industries to improve their leadership skills in their management. Based on that, financial industries can achieve their business target in the business. Financial organisations are able to improve their service quality in the market. As opined by Stewart (2014), improving leadership skills can help financial companies to establish a collaborative working environment in the business. Hence, employment obligations can be reduced in the business. Business organisations are able to improve employee performance based on high leadership skills in their business.
- b) Growth Incentives: Gaining economic health in business can help the organisations to perform incentive programs. Based on these programs financial institution can increase their capital fund and reduce their labour turnover. Additionally, most famous incentive program regarding professional development is tuition reimbursement. This program helps to develop the team members’ skills and reduce member’s issues in their business.
Applying professional development skills can help the companies to be fit and proper for licensing. Additionally, in accordance to Kennedy, (2016), tuition reimbursement programs can help the employees to understand their requirements and gain high business knowledge. Based on that, the organisations are able to reduce team obligation from their management. Additionally, team members’ performance can increase as they can meet their obligations.
As the world has changed and new technologies have introduced in market financial industries can meet their requirements by using relevant technology. The financial organisations have improved their services by using the following technologies
- a) Block chain: In 2017, block chain service has gain popularity in the business. This helps to transfer currency by electronic devices. Based on that, the organisation can be able to transfer currency online by using crypto currency. The opinion of Audretsch et al., (2016), reflects that block chain technology has helped the business organisation to provide better services to their customers and investors. The work practices have developed based on this technology. Additionally, the organisation can be able to increase their market reputation based on unique quality services in the business.
- b) Management apps: Due to new and advance mobile technologies the financial industries can be able to expand their services in their market. Based on new management app work practices can be performed easily in their management. New stock exchange app, budgeting app, money saving app and banking apps helped to maintain quick and better service to the customers. Abate, Rashid, Borzaga & Getnet (2016) stated that the financial organisations can be able to expand their market reputation by using this new mobile app in the business. Therefore, the organisations can be able to meet their legislated requirements based on these requirements.
- c) Storage devices: In the recent time, new storage devices such as cloud computing device and fog computing device have helped to secure financial data. Based on the new storage devices financial industries can securely store business information and financial transaction. Hence, third parties cannot access their personal data and industries can sustain their position in the competitive market. As argued by Rolffs, Ockwell & Byrne (2015), new next generation technologies can help the business industries to improve their security protocols. Based on that, the companies can be to gain competitive advantage over rival industries in Australia.
Industry and organisation Security practices and rationale: The security practices help business organisations to maintain to store their personal data in advance storages devices. In recent times advance storage devices have helped the business organisations to introduce advanced security protocols in the business. These security protocols helped business organisations to gain competitive advantage over their rivals. Additionally, security practices help the business organisations to reduce the third party and hackers’ access to their personal data. Accordingly, number of frauds can be reduced in their financial statement. Business organisations can be able to improve their financial performance from year to year. In the opinion of Ion, Reeder & Consolvo (2015), business industries are able to avoid unnecessary losses in the business based on advanced security practices. This can also help to improve management operations in the business.
Financial Planning
In case the business organisations fail to maintain advance security protocol in their management then they can face market risks. Third party and hackers if receive access on business organisations financial data it can easily manipulated by third parties. Based on that, business organisations can face market risks in the business as assets can reduce. Additionally, financial industries can increase their market liabilities in the business low security protocols. According to McGregor et al., (2015), advanced security protocols can help financial business industries to stabilize their market position and maintain high business performance.
Internal administration system (Accounting system and database): The financial organisations can expand their business by improving their internal administration system. Therefore, employees have to understand the country-specific accounting standard rules. Proper rules can help the business to maintain relevant format and calculation of income statement, balance sheet statement and cash flow statement. Proper accounting system can help the organisations to understand their current financial health. Based on that, financial organisations can take relevant business strategies regarding their future financial progress. As studied by Groomer & Murthy (2018), after evaluating financial performance of the organisations management can store their financial data in an electronic device. This can help their stakeholders and customers to understand the industries financial performance from year to year. Therefore, financial organisations can be able to expand their market share and expand their industry in the international market.
Based on the given case study it is clear that the Hairdressing salon in Carlton is a small business that requires relevant insurance coverage. As the Hairdressing salon is a small business it should seek for a cheaper insurance deal to reduce business risks in the future. Therefore, this salon can take Work cover Insurance in the business since there is an apprentice. In accordance to Babcock (2015), work cover insurance can help a business organisation to protect against the losses that the business has caused their customers. Therefore, in case the business has encountered losses for customers, it can avoid high amount of loss in the business. However, the Business Interruption Insurance of GIO insurance company claims to cover any high amount of loss regarding losses for customers. On the contrary, the insurance package of GIO offers provision of claim due to loss in income due to compensations that are required to be paid to clients.
In addition to that, Hairdressing salon can take fire insurance in their business. In recent times new machines used in hairdressing salons. Hence, the chance of short circuit and fire accidents has increased in the business. This insurance also includes the special provision of other indemnity coverage. AAMI property damage insurance is covers all payments regarding property damage. This insurance package claims to provide a better payment and insurance benefits to this company. This organisation can avoid loss of assets during a fire accident in the future. Hence, the company can maintain high financial performance from year to year. Additionally, this organisation can reduce unnecessary losses in their business. In case any short of fire accidents in the future the business organisations can collect approximately 60% profit in their business. Based on that, the company can be able to expand their sales growth rate in the future.
Interaction of Financial Planning and Insurance
Finally, the business organisation can take liability insurance to reduce loss regarding property damage. In case the employees of Hairdressing salon damage the property then they can collect relevant insurance money to repair this damage. A significant insurance proposition of ALLIANZ insurance package is regarding inventory loss. Property damage can increase financial risks in the business. Additionally, the business cannot be able to increase their cash assets in the market due to high liability in the business. According to Serpa & Krishnan (2016), with help of liability insurance, the business organisation can reduce their liabilities in the business. Hence, cash assets can increase and Hairdressing salon can sustain their position in the competitive market. In case of Commercial Property Insurance, the ALLIANZ insurance company is providing a better insurance deal to this Hairdressing Saloon. The insurance covers loss regarding business vehicles, tools & equipment and building. Hence, the company can reduce their business risks by using Commercial Property Insurance [Refer to Appendix].
The Insurance package of GIO claims to cover losses regarding business interruption. However, this company’s insurance package requires provision of claim. Hence, the customers may not receive a unique quality service from GIO. Additionally, the fire insurance of AAMI covers all property damage regarding fire accident. AAMI also provide high compensation for the hairdressing salon. The Commercial Property Insurance of ALLIANZ claims to cover all damage of commercial tools and provide high insurance benefit. Hence, customer can reduce their business risk based on the insurance package of ALLIANZ.
Conclusion
It can be concluded from the above findings that financial sectors help business organisation to gain market share in the business. The accounting sector guides business industries to management financial statements. Applying country based accounting standard this financial sector suggest relevant format for balance sheet statement, income statement and cash flow statement. Insurance sectors help business organisation to reduce their unnecessary loss due to sudden accidents. Financial planning evaluates the current business progress of the industries and suggests a relevant budget plan. The budget statement forecast the industries future incomes and expenses. Finally, banking sector provides loan, investment services and bookkeeping services to financial industries during market or product development. Triple-bottom line helps to improve economic health of the organisations. Due to cost benefit analysis financial sectors are able to present a relevant business plan for the future.
Reference list
Abate, G. T., Rashid, S., Borzaga, C., & Getnet, K. (2016). Rural finance and agricultural technology adoption in Ethiopia: does the institutional design of lending organizations matter?. World Development, 84, 235-253. DOI: https://dx.doi.org/10.1016/j.worlddev.2016.03.003
Audretsch, D. B., Lehmann, E. E., Paleari, S., & Vismara, S. (2016). Entrepreneurial finance and technology transfer. The Journal of Technology Transfer, 41(1), 1-9. Retrieved from https://tarjomefa.com/wp-content/uploads/2017/07/7043-English-TarjomeFa.pdf Retrieved on 3rd September 2018
Babcock, B. A. (2015). Using cumulative prospect theory to explain anomalous crop insurance coverage choice. American Journal of Agricultural Economics, 97(5), 1371-1384. Retrieved from https://extras.mnginteractive.com/live/media/site36/2011/0913/20110913_043429_census_poverty.pdf Retrieved on 3rd September 2018
Ba?ová, V., Dudeková, K., Kostovi?ová, L., & Baláž, V. (2017). Financial Planning for Retirement in Young Adults: Interaction of Professional Experience, Knowledge, and Beliefs. Studia Psychologica, 59(2), 84. DOI: 10.21909/sp.2017.02.732
Bai, J., Krishnamurthy, A., & Weymuller, C. H. (2018). Measuring liquidity mismatch in the banking sector. The Journal of Finance, 73(1), 51-93. DOI: 10.1111/jofi.12591
Brandon?Jones, E. (2015). Triple?Bottom Line. Wiley Encyclopedia of Management, 1-1. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1002/9781118785317.weom100022 Retrieved on 3rd September 2018
Brounen, D., Koedijk, K. G., & Pownall, R. A. (2016). Household financial planning and savings behavior. Journal of International Money and Finance, 69, 95-107. Retrieved from https://www.sciencedirect.com/science/article/pii/S0261560616300572 Retrieved on 3rd September 2018
Egan, M., Hortaçsu, A., & Matvos, G. (2017). Deposit competition and financial fragility: Evidence from the us banking sector. American Economic Review, 107(1), 169-216. Retrieved from https://www.anderson.ucla.edu/Documents/areas/adm/Deposit%20Competition%20and%20Financial%20Fragility.pdf Retrieved on 3rd September 2018
Ft, (2018), Reserve Bank of Australia holds interest rates at 1.5%, Retrieved from https://www.ft.com/content/ff505fb8-36e5-11e8-8b98-2f31af407cc8 Retrieved on 3rd September 2018
Golombek, P. R., & Johnson, K. E. (2017). Re-conceptualizing Teachers’ Narrative Inquiry as Professional Development. Profile Issues in TeachersProfessional Development, 19(2), 15-28. Retrieved from https://www.scielo.org.co/scielo.php?pid=S1657-07902017000200002&script=sci_arttext&tlng=en Retrieved on 3rd September 2018
Gouchev, V., Knowles, P., Sharp, R., Psaltakis, E., & Lauro, T. (2017). Streamlined Multi Facility Residuals and Biosolids Master Planning with Triple Bottom Line Optimization. Proceedings of the Water Environment Federation, 2017(14), 1121-1132. https://www.ingentaconnect.com/contentone/wef/wefproc/2017/00002017/00000014/art00015 Retrieved on 3rd September 2018
Groomer, S. M., & Murthy, U. S. (2018). Continuous auditing of database applications: An embedded audit module approach. In Continuous Auditing: Theory and Application (pp. 105-124). Emerald Publishing Limited. Retrieved from https://www.emeraldinsight.com/doi/abs/10.1108/978-1-78743-413-420181005 Retrieved on 3rd September 2018
Ion, I., Reeder, R., & Consolvo, S. (2015, July). “… No one Can Hack My Mind”: Comparing Expert and Non-Expert Security Practices. In SOUPS (Vol. 15, pp. 1-20). Retrieved from https://www.usenix.org/sites/default/files/soups15_full_proceedings.pdf#page=349 Retrieved on 3rd September 2018
Kennedy, M. M. (2016). How does professional development improve teaching?. Review of Educational Research, 86(4), 945-980. DOI: 10.3102/0034654315626800
McGregor, S. E., Charters, P., Holliday, T., & Roesner, F. (2015, August). Investigating the Computer Security Practices and Needs of Journalists. In USENIX Security Symposium(pp. 399-414). Retrieved from https://www.usenix.org/system/files/conference/usenixsecurity15/sec15-paper-mcgregor.pdf Retrieved on 3rd September 2018
Michalski, S. A. (2018). From Insurance Premium to Discrete Event. The InsurTech Book: The Insurance Technology Handbook for Investors, Entrepreneurs and FinTech Visionaries, 47-49. Retrieved from https://onlinelibrary.wiley.com/doi/abs/10.1002/9781119444565.ch11 Retrieved on 3rd September 2018
Rehan, R., Unger, A., Knight, M. A., & Haas, C. (2015). Strategic water utility management and financial planning using a new system dynamics tool. Journal?American Water Works Association, 107(1), E22-E36. DOI: https://dx.doi.org/10.5942/jawwa.2015.107.0006
Rolffs, P., Ockwell, D., & Byrne, R. (2015). Beyond technology and finance: pay-as-you-go sustainable energy access and theories of social change. Environment and Planning a, 47(12), 2609-2627. Retrieved from https://journals.sagepub.com/doi/pdf/10.1177/0308518X15615368 Retrieved on 3rd September 2018
Sarkis, J., & Dhavale, D. G. (2015). Supplier selection for sustainable operations: A triple-bottom-line approach using a Bayesian framework. International Journal of Production Economics, 166, 177-191. Retrieved from https://www.researchgate.net/profile/Joseph_Sarkis/publication/268872127_Supplier_Selection_for_Sustainable_Operations_A_Triple-Bottom-Line_Approach_Using_a_Bayesian_Framework/links/547a204d0cf205d1687fac24/Supplier-Selection-for-Sustainable-Operations-A-Triple-Bottom-Line-Approach-Using-a-Bayesian-Framework Retrieved on 3rd September 2018
Schaltegger, S. & Burritt, R., (2017). Contemporary environmental accounting: issues, concepts and practice. Abingdon: Routledge. Retrieved from https://www.taylorfrancis.com/books/9781351282512 Retrieved on 3rd September 2018
Serpa, J. C., & Krishnan, H. (2016). The strategic role of business insurance. Management Science, 63(2), 384-404. Retrieved from https://pdfs.semanticscholar.org/315a/5ff9398f4e2ed350dc2a5a9ee9798cbf43b8.pdf Retrieved on 3rd September 2018
Stewart, C. (2014). Transforming professional development to professional learning. Journal of Adult Education, 43(1), 28-33. Retrieved from https://files.eric.ed.gov/fulltext/EJ1047338.pdf Retrieved on 3rd September 2018
Xe, (2018), XE Currency Converter: AUD to USD, Retrieved from https://www.xe.com/currencyconverter/convert/?Amount=1&From=AUD&To=USD Retrieved on 3rd September 2018
Order an Essay Now & Get These Features For Free:
Turnitin Report
Formatting
Title Page
Citation
Outline
