--An organization has just received a Qualified Auditor report. Auditors have reported the contravention about the...

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Accounting

--An organization has just received a Qualified Auditor report.Auditors have reported the contravention about the director’ssuperannuation not being paid for the past 2 years. Prepare a listof suggestions to management to rectify this contravention; youranswer should focus on the rectification to the internal controlsystem to prevent this contravention in future.

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Wages and salaries paid to an employed director are subject to the same superannuation guarantee law as any other employee Directors fees paid to a company director are considered to be ordinary time earnings and therefore superannuation is applicable However payment for the performance of responsibilities as a member of an executive body such as a body corporate may be deemed wages or salary which may not be ordinary time earnings and therefore superannuation is not applicable to these payments If a director is engaged as a contractor principally for their labour then the ATO would deem them an employee for superannuation purposes A director may legitimately be engaged as a contractor and yet superannuation may still be applicable Dividends paid to a director of a company are not subject to superannuation According to the ATO Superannuation Guarantee Eligibility Tool a contracted director who directly invoices the business and who receives director fees is See Answer

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--An organization has just received a Qualified Auditor report. Auditors have reported the contravention about the...

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Accounting

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