Managerial Accounting For Personal Online Banking

Review of the Stated Mission and Vision of ANZ, NAB and Commonwealth Bank

Describe about the Managerial Accounting for Personal Online Banking.

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

The present study helps in understanding the mission and vision of the organization, corporate objectives along with the background of the three organizations and the industry. The current study also presets in detail the accounting standards as well as the performance measurements that are applicable for the three banks ANZ, NAB and Commonwealth Bank. In addition to this, the current study also helps in understanding the impact of the performance measurement and the accounting standards on the operations of the three corporations. In addition to this, the current study also elucidates in detail the role of the management accountant in assisting the process of management. The study also expounds in detail different controls in the organization. The performance of the firm the perspective of the share price movement, dividend declaration and the controls can help in analysing the financial status of the three banks ANZ, NAB and Commonwealth Bank.

Review of the stated mission and vision of ANZ, NAB and Commonwealth Bank

The vision statement of the ANZ Bank mentions the willingness of the company to acquire the best talents to work at the organization. The vision statement also states that the diversity of the ideas as well as experiences can be considered as the key to our success.

Corporate goals of the organization

Save Time On Research and Writing
Hire a Pro to Write You a 100% Plagiarism-Free Paper.
Get My Paper

Commonwealth Bank:  The aim of the Commonwealth Bank is

To attain indigenous employment parity within 10 years and get Indigenous employees that makes up 3% of the Australian workforce and aligns with the proportion of the Indigenous Australians in the wider national population.

To ensure that the Commonwealth Bank Group can get access to funding from different capital markets in Australia as well as offshore Commbank.com.au 2016

To get a “AA” credit rating band and to maintain the position

To ensure adequate, cost effective as well as sustainable sources of finances in the long term in order to meet the ongoing liquidity requirements of the Commonwealth Bank and to satisfy the prudential requirements implemented by the management as well as monetary authority Commbank.com.au 2016

National Australia Bank: The aim o f the National Australia Bank is

To differentiate the business in the potential of clients, communities and members of the staff and to make a positive impact on the clients as well as communities Nab.com.au 2016

To meet the banking needs of the customers through the widespread international network of different branches, representative offices as well as subsidiaries in Australia, New Zealand, UK, USA and different parts of Asia.

Corporate Goals of the Organization

To concentrate on upholding the increasing business, trade as well as foreign direct investment flows between Australia, New Zealand, UK, USA and different parts of Asia Nab.com.au 2016

ANZ Bank:  The aim of the ANZ Bank is

To sustainably increase the overall sales as well as profitability Anz.com 2016

To grow faster than the norm and to detect opportunities Anz.com 2016

Background of the companies

The Commonwealth Bank, an Australian Transnational Bank operates across different places that include New Zealand, Fiji, United States of America and United Kingdom. The Commonwealth Bank offers various financial services that include retail, business as well as institutional banking, management of fund, superannuation, insurance, and investment as well as broking services Whittington and Pany 2012. The Common wealth Bank can be regarded as the largest listed corporation in the Australian Stock Exchange.

National Australia Bank is also one of the largest financial institutions in Australia from the perspective of market capitalization as well as customers. NAB is also ranked as the 21st largest bank in the world enumerated in terms of market capitalization. In addition to this, the NAB is also regarded as the 41st largest bank in the world enumerated in terms of total assets during the year 2014.

ANZ Bank, New Zealand’s largest financial services functions as a subsidiary of Australia as well as New Zealand Banking Group Limited of Australia Anz.com 2016. The publicly traded bank operating in the finance and insurance sector, headquartered in Auckland, New Zealand offers products and services such as the cheque amounts, insurance, stock brokerage, investment banking, asset based lending and consumer finance.

Industry Background

The banking industry in Australia comprises of a number of banks that are registered to execute different banking activities as stipulated under the Banking Act 1959. The banking industry in Australia also consists of foreign banks that are also licensed to function through different branches in Australia as well as Australian integrated foreign bank subsidiaries. 

Academic Theory: Company Accounting System and Performance Measurement Systems

Impact of the accounting principles on the performance measurement

According to the latest annual report of the company Commonwealth Bank in Australia, the management of the company presents the annual statements as per the Corporation Act 2001 as well as the Australian Accounting Standards that again conform with the International Financial Reporting Standards IFRS. The financial performance of the group expressed in terms of the net profit after tax, return on equity and Earnings per share is made on the statutory basis. Furthermore, the Management Discussion and Analysis MDA also presents the net profit after tax on both the statutory as well as cash ground. The management of the company “Commonwealth Bank” uses the cash basis in order to present a transparent view of the underlying results of the operation after exclusion of different items that bring in volatility and distortions. The items such as the hedging along with the IFRS fluctuations are enumerated persistently with the previous year and previous half disclosures and do not differentiate between both positive as well as negative adjustments Edmonds, Tsay and Olds 2011. The company also maintains strong capital position according to the BASEL III regulatory framework for capital and presents the Basel III Common Equity Tier I ratio on an internationally comparable basis APRA basis. As mentioned in the annual report of the corporation Commonwealth Bank, the company prepares and presents the General Purpose Financial Reports as per the Australian Accounting Standards  that also includes the Australian Interpretations with the desirable quality of the AASB 1048 “Interpretation and Application of Standards as well as the obligations of the Corporation Act 2001. The financial declarations of the corporation are essentially measured under the historical cost convention barring certain assets as well as liabilities including certain derivative tools enumerated at fair value (Edmonds, Tsay and Olds 2011). 

Background of the Companies

The measurement of the performance of the bank follows certain principles. The subsidiaries of the company are accounted for at cost after deduction of the accumulated impairments at the level of the bank. Cost is enumerated as the aggregate fair values of the assets, equity instruments or else the liabilities incurred/ supposed at the date of transaction Garrison, Noreen and Brewer 2012.

According to the annual report of National Australia Bank, the management of the company also presents the financial reports as per the Australian Accounting Standards Board and the Corporation Act 2001. In addition to this, the company also follows the statutory basis as well as the cash basis for the management discussion and analysis report. In addition to this, the management of the National bank of Australia also prepares the financial statements as per the historical cost convention. This has changed by different applications of the fair value enumerations permitted by the pertinent accounting standards Garrison, Noreen and Brewe 2012.

Similarly, the annual report of ANZ Bank of Australia also reveals the fact that the financial statements of the company are both prepared as well as presented according to the obligations of the Companies Act 1993, the Financial Reporting Act 1993 in addition to the Order (Anz.com 2016). Furthermore, the financial declarations are also prepared as per the New Zealand generally Accepted Accounting Practice. This also conforms with the New Zealand equal to the International Financial Reporting Standards NZ IFRS. In addition to this, the corporation also prepares the financial reports as per the historical cost convention excluding specific assets as well as liabilities that are essentially stated at the fair value Horngren and Horngren 2012.

Comparative study of the Measures to maintain control

The internal control refers to the process of auditing as well as accounting that can help the organization to maintain operational efficacy as well as efficiency Arens, Elder and Beasley 2012. The management of Commonwealth Bank maintains that internal control by maintenance of reliability of financial reporting, provision of timely opinion regarding the strategic objectives of the organization Auditing, assurance and ethics handbook 2012. The management of Commonwealth Bank also adheres by the regulations stipulated under the relevant accounting standards under the Australian Accounting Standards Board and the Corporation Act 2001. Again, the corporation also has an audit committee for the maintenance of control. The PricewaterhouseCoopers PwC provides the audit as well as non-audit services. The company also declares that the financial report of Commonwealth Bank of Australia and mentions that the report gives a true as well as fair view of the company and the financial position of the consolidated statements Horngren, Harrison and Oliver 2012. In addition to this, the report of the auditor states that the financial statements comply with the Australian Accounting Standards and the Corporations Regulations Act.

Industry Background

Similarly, the National Australian Bank also has a audit committee that can meet the control requirements. The mandate committee also helps in ensuring the integrity of the different financial controls of the bank, systems of financial reporting as well as internal standards of audit. Again, the committee for internal control also consists of minimum of three members where majority of the members of the committee are independent Horngren, Harrison and Oliver 2012. The internal control of the National Australian Bank is also maintained by the audit committee of the bank Braun 2012. The Ernst & Young acts as the external auditor that helps in the regulatory audit, assessments as well as assurances for different group business entities. In addition to this, the audit committee also carries out non-audit assessments, attestations as well as assurances for group business entities. The EY is also compatible with diverse obligations that are imposed by different regulations stipulated under the Corporations Act 2001.

Similarly, the ANZ Bank Limited also has an audit committee that can meet different control requirements. The mandate committee also helps in ensuring the integrity of different financial controls of the bank, systems of the financial reporting as well as internal standards of audit Jones, Atkinson and Lorenz 2012. Furthermore, the audit committee for different internal controls also comprises of the minimum of three different members where the majority of the members of the committee are independent. The controls of the management refers to the preparation of the financial report on capital adequacy in accordance with the Bank’s Conditions of registration, Bank’s Internal models for risk of credit as has been accredited by the Reserve bank of New Zealand. In addition to this, the internal controls of organization ANZ Bank Limited also includes expression of opinion concerning the supplementary information that are primarily prepared according to the “schedules 4,7,13,14, 15 and 17 of the Order and is included within notes 13,14, 26, 27,29 and 34 of the Disclosure Statement”.

Role of the management accountant in providing assistance

The management accountants help in driving the overall business of the organization by determining the overall status as well as success of the corporation. The role of the management accountant is mainly to carry out a series of tasks in order to ensure the financial security of the organization, management of the different financial matters among many others Mowen, Hansen and Heitger 2012. The management accountant essentially handles the tasks of budgeting, managing taxes, managing assets and aiding in strategic management. In addition to this, the management accountant also prepares and presents the financial statements, assesses the overall internal control of the organization, analyzes the financial information and aids in creation of the different company budgets Noreen, Brewer and Garrison 2011. Furthermore,, the management accountant of the corporation also assists in supervision of the accountant staff, completion as well as review of tax returns and help in management of the overall ledger Mowen, Hansen and Heitger 2012.

Impact of the Accounting Principles on the Performance Measurement

The individual report focuses on the remuneration report, use of the accounting principles and standards, conceptual framework and the financial performance of the three different corporations.

Analysis of the remuneration report

Commonwealth Bank:

As per the remuneration report declared in the latest annual statement of the company Commonwealth Bank, the statutory remuneration disclosures of the company are prepared in accordance with the Australian Accounting Standards along with the Corporation Act 2001. Incentives provided to the CEO as well as the Group executives are directly linked to the financial as well as non-financial performance of the firm. CEO receives the fixed remuneration, short-term incentive cash, equity awards, deferred cash and equity awards and previous year’s awards. The cash payments to the CEO are mainly based on the base remuneration as well as superannuation and the fraction not deferred.

Figure 1: Remuneration of CEO 2015

ANZ bank New Zealand Limited

According to the remuneration report declared in the annual statement of the ANZ bank New Zealand Limited, the company has a remuneration committee that adheres to the stipulated charter.

National Australia Bank Limited

In addition to this, the remuneration report of the National Australia Bank Limited is presented in accordance to the section 30 A of the Corporations Act 2001. The management of the National Australia Bank Limited also has a remuneration committee for management of the remuneration. The remuneration report mentions that the remuneration is also linked to the performance of the company. The company awards short-term incentives in addition to the fixed remuneration as well as superannuation Drury 2013. There are fixed remuneration, short-term incentive and long term and long-term incentive. The reward components consist of both cash rewards and “at risk rewards” Drury 2013.

Figure 2: Remuneration reward component of NAB

Financial performance

Commonwealth Bank

The financial performance of the company Commonwealth Bank can be analyzed using the prices of the shares for the last five years. The performance of the company improved as the share prices increased from approximately 34 during 8/9/2011 to 47 in 2/7/2012. Subsequently, the share prices rose to 55 during the same period in 2013. Thereafter the share price of the Commonwealth bank increased to 67 during 2014. The consistent increase in the prices of the shares reflects the improvement in the financial position of the company in the market. The performance of the shares also represents the financial position of the company.

Therefore, the share price movements of the three different firms reveal the fact that the Commonwealth bank has better financial position with higher prices of the shares in the market during the same period of 2011 to 2016. The companies can use these movements in the prices of the shares as a criterion for measurement of the performance of the organization. Again, in addition to this, the dividend declaration of the company can also be regarded as the performance measurement system that can help in measuring the efficacy of the operation that in turn can help in creating the value of the shareholders of the organization.

ANZ Limited

The dividend declaration of the ANZ Limited has increased from 1.08 during 2011 to 1.14 during 2016. The increase in dividend payout also replicates greater value of the shareholders. The share prices of the company ANZ Bank are recorded to be 12.77 during the year 2011 September. Thereafter, the share prices rose 14.13 during the same period in 2012. Again, the share prices rose to 23.90 in 2013 and thereafter reached 30.9 in 2014. However, the prices of the shares thereafter declined during the year 2015 and 2016. The movements of the share prices reflect that the financial condition of the company was favourable for the duration 2011 to 2014. However, the performance took a downturn during the year 2015 and 2016.

National Australian Bank

Again, the dividend declaration for the National Australian Bank decreased from 0.87 during 2011 to 0.36 during 2016. The decrease in the dividend declaration mentions the fact that the company failed to create value for the shareholders during the period. The financial performance of the company National Australian bank can also be assessed from the share prices of the firm for the last five years. The share prices of the bank were registered to be 10.56 during 2016. However, the same was recorded to be 13.42 during the year 2011. Therefore, the financial performance of the corporation declined during the said duration of 2011 to 2016.

The three banks can be compared based on application of the accounting standards, remuneration report, control measures and financial performance. The chart below can explain the similarities and the differences between the three different banks.

Commonwealth Bank

ANZ Bank

National Australian bank

Accounting Standard-

Corporation Act 2001, AASB and IFRS

Remuneration Report-

Australian Accounting Standards along with the Corporation Act 2001

Control Measures-

The management of Commonwealth Bank also adheres by the regulations stipulated under the relevant accounting standards under the Australian Accounting Standards Board and the Corporation Act 2001. Again, the corporation also has an audit committee for the maintenance of control. The PricewaterhouseCoopers PwC provides the audit as well as non-audit services.

Financial performance

Share Price Movement:

The performance of the company improved as the share prices increased from approximately 34 during 8/9/2011 to 47 in 2/7/2012. Subsequently, the share prices rose to 55 during the same period in 2013. Thereafter the share price of the Commonwealth bank increased to 67 during 2014

Accounting Standards-

Companies Act 1993, Financial Reporting Act 1993 in addition to the Order, International Financial Reporting Standards NZ IFRS

Remuneration Report-

30 A of the Corporations Act 2001

Control Measures

The mandate committee also helps in ensuring the integrity of the different financial controls of the bank, systems of financial reporting as well as internal standards of audit. Again, the committee for internal control also consists of minimum of three members where majority of the members of the committee are independent. The controls of the management refers to the preparation of the financial report on capital adequacy in accordance with the Bank’s Conditions of registration, Bank’s Internal models for risk of credit as has been accredited by the Reserve bank of New Zealand

Financial performance

Revenue:

Dividend Declaration:

The dividend declaration of the ANZ Limited has increased from 1.08 during 2011 to 1.14 during 2016.

Share price movement:

The share prices of the company ANZ Bank are recorded to be 12.77 during the year 2011 September. Thereafter, the share prices rose 14.13 during the same period in 2012. Again, the share prices rose to 23.90 in 2013 and thereafter reached 30.9 in 2014. However, the prices of the shares thereafter declined during the year 2015 and 2016. The movements of the share prices reflect that the financial condition of the company was favourable for the duration 2011 to 2014.

Accounting Standards-

Australian Accounting Standards Board and the Corporation Act 2001

Remuneration Report-

Australian Accounting Standards along with the Corporation Act 2001

Control Measures

The mandate committee also helps in ensuring the integrity of the different financial controls of the bank, systems of financial reporting as well as internal standards of audit. Again, the committee for internal control also consists of minimum of three members where majority of the members of the committee are independent. E&Y acts as the independent auditor of the company.

Financial performance

Dividend Declaration:

Dividend declaration for the National Australian Bank decreased from 0.87 during 2011 to 0.36 during 2016

Share price movement:

The share prices of the bank were registered to be 10.56 during 2016. However, the same was recorded to be 13.42 during the year 2011. Therefore, the financial performance of the corporation declined during the said duration of 2011 to 2016.

As per the movements of the share prices, the performance of the Commonwealth Bank can be regarded can be considered to be very satisfactory as the share prices have increased consistently over the years. The share prices of the ANZ Bank have also increased during the period. However, the share prices of the NAB declined during the said period. Therefore, the financial performance of the Commonwealth Bank can be considered to be the best from the perspective of share price movements. In line with the increase in the share prices during the period, the management of ANZ Bank also increased the dividend declaration of the firm that in turn increased the value of the shareholders of the firm and provided positive influence on the sentiments of the investors. However, the dividend declaration of the NAB declined during the period from 0.87 in 2011 to 0.36 in 2016, indicating the unfavourable condition of the firm.

Conclusion

In conclusion, it can be said that the present study helps in understanding the mission and vision of the organization, corporate objectives along with the background of the three organizations and the industry. In addition to this, the current accounts also help in gaining deep understanding regarding the accounting systems and principles that are followed in the three different corporations. Furthermore, the study also helps in gaining an overview regarding the impact of the accounting standards on the performance of three different banks. Thereafter, the study helps in understanding the different management controls along with the role of the management accountant in the managing organizations. Finally, the study presents a comparative analysis of the performance of the three different banks with respect to the different performance system that includes the movements in the prices of the shares and the dividend declaration by the management of the corporation.

The current study has helped me to understand that the accounting standards, policies and principles that are applicable in the three different banks. The study has also helped me t understand the different performance measurements that the management of the organization applies for the enumeration of the performance. Again, the current account has also helped me to gain an overview regarding the role of management accountants in assisting the management of the corporation. Furthermore, the present study also helps in gaining overview regarding different internal as well as external controls that companies can apply for detection of the risks and the fraudulent activities and the mistakes.

References

Anz.com. 2016. Personal – Online Banking | ANZ. [online] Available at: https://www.anz.com [Accessed 9 Sep. 2016].

Arens, A., Elder, R. and Beasley, M. 2012. Auditing and assurance services. Boston: Pearson.

Auditing, assurance and ethics handbook 2012. 2012. Frenchs Forest, N. S. W.: Pearson Australia.

Braun, K. 2012. Managerial accounting. Toronto: Pearson Prentice Hall.

Commbank.com.au. 2016. Personal banking including accounts, credit cards and home loans – CommBank. [online] Available at: https://www.commbank.com.au [Accessed 9 Sep. 2016].

Drury, C. 2013. Management accounting for business. Andover: Cengage Learning.

Edmonds, T., Tsay, B. and Olds, P. 2011. Fundamental managerial accounting concepts. New York: McGraw-Hill Irwin.

Garrison, R., Noreen, E. and Brewer, P. 2012. Managerial accounting. New York: McGraw-Hill/Irwin.

Horngren, C. and Horngren, C. 2012. Management accounting. Toronto: Pearson Canada.

Horngren, C., Harrison, W. and Oliver, M. 2012. Accounting. Upper Saddle River, N.J.: Pearson Prentice Hall.

Horngren, C., Harrison, W. and Oliver, M. 2012. Accounting. Upper Saddle River, N.J.: Pearson Prentice Hall.

Jones, T., Atkinson, H. and Lorenz, A. 2012. Strategic managerial accounting. Oxford: Goodfellow Publishers.

Management accounting. 2012. London: BPP Learning Media Ltd.

Mowen, M., Hansen, D. and Heitger, D. 2012. Cornerstones of managerial accounting. Mason, OH: South-Western Cengage Learning.

Nab.com.au. 2016. Personal. [online] Available at: https://www.nab.com.au [Accessed 9 Sep. 2016].

Noreen, E., Brewer, P. and Garrison, R. 2011. Managerial accounting for managers. New York: McGraw-Hill Irwin.

Seal, W., Garrison, R. and Noreen, E. 2012. Management accounting. London: McGraw-Hill Higher Education.

Shim, J. and Siegel, J. 2012. Managerial accounting. New York: Schaum.

Whitecotton, S., Libby, R. and Phillips, F. 2011. Managerial accounting. Boston: McGraw-Hill Irwin.

Whittington, R. and Pany, K. 2012. Principles of auditing & other assurance services. New York: McGraw-Hill Irwin.