APES 305 arrived with not too much fanfare in December 2020, and it hasn’t received too much news at present.
In December 2020 a revised APES 305 was released with a requirement, effective 1 July 2021, to disclose material outsourcing.
A Member in Public Practice shall document and communicate to the Client the Terms of Engagement.
Utilising Outsourced Services or Cloud Computing in the provision of Professional Services to a Client impacts the amount of risk associated with the Professional Service being delivered and the management of the Client’s confidential information.
Section 3.7 Where a Member in Public Practice will utilise Cloud Computing in the provision of Professional Services to a Client which is not an Outsourced Service, the Member in Public Practice should document and communicate to the Client the details of the Cloud Computing provider, the geographical location of where the Cloud Computing will be provided and how the Client’s confidential information will be stored.
So now any firm “Utilising Cloud Computing”, is required to disclose (material business activity of) utilisation of Cloud Computing:
- Details of the cloud computing provider;
- Geographical location where the cloud computing will be provided;
- the Client’s confidential information will be stored.
Comment: We expect most accounting firms will need to do some serious homework to fully evaluate the cloud computing services they are using: everything from where their server is hosted, where server backups are stored, where any client data will be stored if received by email, where client data will be stored if their website allows data to be sent through an upload page, whether they use a third party upload provider, whether they use Microsoft office like cloud products (where client data is likely to be stored), bookkeeping packages (Xero, QuickBooks online), accounting and tax preparation packages. It’s going to be quite a major task for many firms.
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.
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