Question

18. Activity statements must be lodged in accordance with statutory, legislative and regulatory requirements. How can an effective accounting system help? (200–250 words)

Answer 1

As per law, the activity statements or the financial statements has to be kept in accordance with the statutory, legislative and regulatory requirements. To keep the books in such manner, effective accounting systems can help.

Law requires that activity statements should be true and fair that is error free. In an effective accounting systems has no place for an error. So, if there will be no error, there will be less audits from the regulators. Error free systems will be helpful to get a true and fair financial statement and annual statements. This can be filed with the regulators and can be presented to the shareholders. So, this will keep up with the statutory and regulatory requirements.

Generally in an effective accounting systems, all the internal systems are connected to one other. They are linked in such a way that if you change anything at one place, it gets reflected at the other places. Because of the same, you can come to know about any errors or frauds taking place at any place in the system. With an effective accounting system, you can track the same and get in cleared and you will not have to handle any legal implications from the law. You can get an error free and fraud free reports.

An effective accounting system is organised, well maintained system, that takes care of all the legal requirements automatically. They are build as per the applicable laws and so you will not have to worry about compliances with the law. Generally, in all the accounting systems you get warnings to file returns or any other documents as per law. They also provide you with the deadlines for the same.

So, an effective accounting system helps in complying with the statutory, legislative and regulatory requirements.