Mar 2021

APES 305 Disclosure accounting outsourcing

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

By: Odyssey Legislation
Tags: apes 305, australian accounting, Disclosure, Outsourcing, terms of engagement

APES 305 sets the standards in respect of Terms of Engagement for Members in Public Practice in the provision of quality and ethical Professional Services to Clients.

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.

There’s also a reference to APES GN 30 Outsourced Services. (GN = Guidance Note), which is worth taking the time to read APES GN 30 as whilst the guidance note was first drafted in January 2012, it was more recently revised February 2020.

Odyssey was involved and contributed to the original draft of APES GN30 in January 2012, and we believe there are many important components to assist in implementing a quality outsourcing solution. There are also some examples worth revisiting in Appendix 1.

Comment: Odyssey is expecting there will be a flight to quality offshore providers, given accounting firm clients are going to now be fully aware of the outsourced services provider including their name and geographical location.  It won’t take more than a few minutes for any accounting firm clients to do a quick due diligence on the overseas provider, and back alley providers are likely to suffer under the mandatory requirements on 1 July 2021.

Whilst this is not a mandatory part of the Standard, we bring to your attention that Odyssey is an Australian Registered tax agent, and with Australian Public Practice certificates as required by their Australian accounting professional body, and Australian professional indemnity insurance.

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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