Are you ready to disclose your Australian accounting outsourcing: 1 July 2021 APES305

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In December 2020 a revised APES 305 was released with a mandatory requirement, effective 1 July 2021, to disclose material outsourcing.

In section 3.6 Where a Member in Public Practice will utilise Outsourced Services in the provision of Professional Services to a Client, the Member shall document and communicate the details of the Outsourced Service Provider, the geographical location of where the Outsourced Services will be performed and the nature and extent of the Outsourced Services to be utilised.

So now any firm “Utilising Outsourced Services (or Cloud Computing)”, is required to disclose (material business activity to) an outsourced services provider:

Details of the outsourced services provider;
Geographical location where the outsourced services will be performed;
Nature and extent of outsourced services.

This has far reaching impact for any Australian accounting service provider who uses third parties in the performance of their accounting and tax preparation work.

For instance, if you use an actuarial certificate provider in the completion of a Self Managed Super Fund, you will now need to provide the details (name) of the provider, geographic location of where the Outsourced Services will be performed and the nature and extent of the Outsourced Services to be utilised.

There will be some complexities with SMSF audits. In practice many Australian accounting firms arrange the audits with one provider for ease of servicing their SMSF clients, and also normally route invoicing through their firm for ease of payment.

The SMSF auditor is, in theory, responsible for disclosure of any third party outsourcing services utilised. So for example, where they use property valuation services, it is expected that the service provider would need to be disclosed, along with comment on where the service will be provided from, and what confidential client information will be stored.

There’s certainly going to be a lot of disclosure required come 1 July 2021.

We hope you enjoyed this blog, and remember if you need assistance with your outsourced Australian tax compliance work then please drop us a line.