Accounting and Auditing Services in Australia: An Overview
Accounting and Auditing of the records are the primary and most crucial functions of any company in Australia as it helps them to keep track of all their financial transactions and also keep a check on future transactions. These functions allow the decision-makers of the company to determine the financial stability of the company and also take informed decisions in time.
Outsourcing the accounting and auditing functions of your Australian company helps to save huge overhead costs. Enterslice offers virtual accounting and auditing services in Australia for your firm by precisely catering to the accounting and auditing needs of your Australian registered entity.
Statuary requirements for Accounting and Auditing Services in Australia
As per the requirements laid down in the Corporations Act 2001, every large proprietary company and every public company is supposed to get its audit done at least once every year. If a company meets any of the following two criteria, it is considered to be a large proprietary company in the eyes of the law:
- The consolidated revenue of the company for the entire financial year of the company and the entities that it controls is more than $50 million AUD.
- The grossvalue of the total assets of the company and the entities the company controls at the end of the financial year stands equal to or more than $25 millionAUD.
- The company, along with the entities under its control, employs 100 or more employees at the end of the financial year.
These companies have to appoint an auditor for the same. The appointment of the auditor in case of a public company has to be done within a month’s time from the date of the registration of the company.
Audit requirements can also arise in other instances too for other proprietary companies apart from the ones mentioned above. For instance, when a company is controlled by a foreign entity or if a bank providing finance to the company has requested for an audit. An audit can also be conducted by the company itself in order to provide third-party assurance that their accounts are being recorded appropriately. This is especially beneficial for those companies that have a small accounting staff.
The law also made it obligatory for all public companies, large proprietary companies and registered managed investment schemes (MIS) to prepare, compile and furnish their annual financial report to the Australian Securities and Investment Commission (ASIC). The financial report has to be prepared in accordance with the prevalent accounting standards and presents a true and fair view of the company’s financial position for that particular period, along with the director’s annual report. These companies are allowed to seek exemption from this obligation by requesting ASIC.
The annual financial report of these companies consists of the financial statements of a particular year, notes to these financial statements, and the declaration of the directors about these financial statements. Another declaration is required to be submitted declaring whether the company will be able to pay its debts as and when they become due and payable.
Every registered MIS and disclosing entity, such as a listed company, is obligated to furnish its financial report within a period of three months from the end of the financial year. Such disclosing entities are also required to furnish their half-yearly accounts within a period of 75 days from the end of the half-year. All the other reporting companies are required to submit their financial reports within a period of 4 months from the end of the financial year.
On the other hand, a small proprietary company has to prepare and maintain accounting records, but it is only supposed to prepare an annual financial report and directors’ report and submit them with the ASIC if it is:
- Required to be done by ASIC or if it is required to be done by the shareholders of the company holding at least 5% of the votes; or
- Controlled by a foreign company that has not submitted its audited financial accounts to the ASIC
Further, the registered foreign companies are required to make a submission of their financial statements with the ASIC at least once in every calendar year and at an interval of not more than 15 months. The financial statements of the company comprise the company’s cash flow statement, balance sheet and profit and loss statement (all prepared up to the end of the last financial year) along with any other document that a company is supposed to prepare according to the law that is applicable to the company’s place of origin coupled with an ASIC document verifying those financial statements.
Like other large proprietary companies, even foreign-controlled companies to small proprietary companies have the option of making an application to the ASIC and requesting it to grant them relief from submitting the annual financial reports and directors’ reports.
Types of Accounting Services in Australia
- Bookkeeping and Transactions processing Services -
Enterslice assists in setting up your books of accounts and all the accounting ledgers required by your business on a cloud-based platform and helps you make a transition from the old dated computerised systems to cloud-based accounting platforms for better access. We further assist in maintaining the books of your company on a monthly, quarterly or annual basis. The books are prepared on the basis of approved payment vouchers, bank statements, approved claim forms, bank credit advice, bank-in slips, bank debit advice and other accounting sources.
We also help in automating the bank account feeds for your business and in setting up all the payments in bank transactions for obtaining clients’ approval online.
- Financial Reporting and Management of Accounts -
The most important part of accounting services is the preparation and filing of monthly accounts, which includes the Balance sheet, income statement, Trial balance and Bank Reconciliation statement for your local office and your headquarters. Enterslice provides these financial reporting services on a monthly, quarterly and semi-annual basis.
- Payroll and GST reporting -
Enterslice takes care of all your regular payroll compliances, including filing and reporting requirements on a monthly basis. We also prepare and file monthly GST returns on behalf of your business entity.
- Filing of Corporate Income Tax (CIT) Returns -
The Corporate Income Tax team atEnterslice ensures that all your income tax records are compiled and the income tax reports are filed properly and all the possible tax exemptions and incentives have been applied and availed by your business. Enterslice also advises on the lines of regional tax efficiency. The CIT tax returns are filed on an annual basis.
- Assistance in receiving R&D tax incentives -
Enterslice has specific expertise in assisting Australian businesses in obtaining benefits under the Federal Government’s R&D Tax Incentive Program.Enterslice works along with your company to ensure that your business becomes eligible for availing the R&D tax incentives. Application for availing of these incentives is made on an annual basis.
- Assistance in reporting fringe benefits tax returns -
There is another tax that needs to be filed by the employers. This tax is known as fringe benefits tax (FBT), which is imposed on certain benefits that are extended by the employer to its employees or the employee’s family members or other associates. This tax has to be reported separately. Enterslice advises you about the occasions where these taxes can be levied and accordingly make the filings. FBT returns are filed once a year.
Types of Auditing Services in Australia
- Financial Statement Audit-
The financial statements audit’s purpose is to form a view on whether the data input in the financial reports prepared by the company reflects the true and fair view of the financial position of the company on a given date. For example, whether the information about the assets owned by the company have been properly incorporated in the balance sheet or not. Whether the profits and losses of the company have been properly assessed or not. As mentioned above, there are certain smaller entities that are subject to the Corporations Act have to conduct an audit of their financial statements at least each year.
- Trust Account Audit -
Generally, trust account audits are usually meant for specific professionals such as accountants, lawyers, real estate agents, settlement agents, motor vehicle agents etc. in Australia. These professionals need to comply with their respective ethical requirements, especially when they are dealing with their ‘clients’ monies’ over which they do not have any entitlement. There can be situations when the accountant is responsible for managing the trust account to receive tax refunds or pay a deposit or make payments in advance etc. Therefore, an audit becomes necessary to maintain the trust of the client. For the accountants, it has been made mandatory to conduct an annual audit at least once every year when they are dealing with the clients’ monies.
Again, in the case of the settlement agents, their trust accounts are audited, and the report of the same has to be furnished to the Consumer Protection department within a period of three months from the end of the audit. Similarly, in the case of real estate agents holding current triennial certificates, audits have to be conducted by an approved auditor, and the audit report is supposed to be submitted to Consumer Protection within a period of 3 months from the date of conclusion of the audit.
- Self-Managed Superannuation Fund Audit -
In order to file the annual Self-Managed Superannuation Fund (SMSF) tax returns, an SMSF auditor has to be appointed as per the guidelines issued by the Australian Taxation Office. Such an auditor must be appointed at least 45 days before the due date of filing the SMSF tax returns. All the SMSF funds need to be audited every year by an approved SMSF auditor. Apart from offering SMSF audit services, Enterslice also has a team of dedicated audit experts having technical expertise in audit compliances and regulation of superannuation laws.
- Internal Audit -
In the current environment of the ever-evolving and rapidly changing technology and business environment, there is only one constant, i.e. risk. It is the tool of internal audit that provides the management with assurance and comfort about the risk and control environment of an organisation. In today’s time, internal audit has not been restricted to the scope of financial control only; instead, the business needs access to various specialists having expertise in a number of fields. This mix of expertise is necessary in today’s time because the risks are many and varied.
Enterslice is a global Consulting firm offering accounting and auditing services in Australia. It is advised that professionals should always be ready for the audit by hiring tax agents to conduct pre-tax auditing.