Dec 2017

The full Monty. When others do your compliance work..

The full Monty… When others do your compliance work

By: Odyssey Outsourcing
Tags: engagement letters, full monty, outsourcing disclosure

So, you are considering outsourcing, and you don’t know your responsibilities. The common recommendation is that the consent is sought in the Engagement letters.

So who is interested in what you put in you engagement letters, and what do you really need to put in them anyway…

Who is interested in what you put into your engagement letters:


  • Letters of engagement
  • Code of Professional Conduct – Confidentiality of client information


  • 2007 CPA Ethical Dilemma
  • 2015 CPA Terms of Engagement

Australia’s privacy principles:

  • Either APP’s or NPP’s
  • NPP 9 – Cross-border transfer of personal information
  • APP 8 – Cross-border disclosure of personal information


  • APES GN 30 Outsourced Services. GN = Guidance Note

Consent per the TPB

The TPB has indicated that the use of outsourcing is best agreed with the Accountant’s client in an engagement letter.

The TPB has not (to date) stipulated the format of engagement letters, and their position regarding engagement letters is that:

  • Engagement letters are not compulsory, but the TPB  highly recommends their use. In a 2016 poll only 73% were using engagement letters.
  • If necessary, Engagement letters should also include permissions regarding outsourcing and providing information to third parties
  • The TPB often receives requests for a template of an engagement letter. However, the TPB considers that each business needs to develop the engagement letter that best suits their business model.
  • They do provide “examples” of what should be included in an engagement letter

Consent per the CPA/CA/IPA

The CPA has put a lot of time into advising accountants on their compliance requirements with respect to outsourcing.

Their outsourcing area has a lot of great resources. The 2016 CPA Australia outsourcing guide, Outsourcing: Opportunity or Threat, continues to be the gold standard landmark document and is a 75 page feast of information for Australian Accountants. Lead authors include our own David Carter, FCPA, CEO of Odyssey Resources.

The CPA Australia Sample terms of engagement letter, which has some good wording on outsourcing

More information

If you’d like more information, please drop us a line, and we’ll be happy to chat with you more about the legal requirements of disclosure, and welcome you to request a copy of our 5 pages detailed document “The Full Monty… Or what to tell your clients about outsourcing”.

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