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Five Tips to Ensure your Financial Accounts are Lodged in Time

Posted on October 19th, 2015 by Sophie Gerber in AFSL Compliance

control-427512_1280All Australian Financial Services Licence (AFSL) holders and limited AFSL holders are required to lodge annual financial accounts with the Australian Securities and Investments Commission (ASIC). The tips below will help to ensure successful lodgement of your financial accounts within the required timeframes.

  1. Know your lodgement date

The lodgement dates for the various types of entities are different and it’s important to know which category your AFSL falls into to avoid late fees. Late lodgement will also result in a breach of your AFSL which may need to be reported to ASIC.

  • If the entity holding the AFSL is a non-body corporate then your financial accounts are due within two months of 30 June (ie: 30 August).
  • If the entity holding the AFSL is a body corporate that is a disclosing entity then your financial accounts are due within three months of 30 June (ie: 30 September).
  • If the entity holding the AFSL is a body corporate that is not a disclosing entity then your financial accounts are due within four months of 30 June (ie: 30 October).
  1. Get in contact with your auditor

The earlier you can get in contact with your auditor, the better chance you have of lodging your financial accounts on time. The process to collect the required documents, prepare the reports and complete forms can be onerous and slow, particularly in a small businesses where there is no designated accounting team and correspondence from auditors can be overlooked. Consider diarising contacting your auditor in early July (or as early as possible) to ensure the processes are well underway as soon as possible after 30 June.

  1. Know the required forms

AFSL holders are required to complete and lodge the following forms:

  • Form FS70 – this is a profit and loss balance sheet and gives a summary of the financial situation of the AFSL holder. The form also covers the tailored requirements for Responsible Entities, custodial and depository service providers and retail OTC derivative issuers. Your statements must be attached to this form.
  • Form FS71 – this form is an audit report and is completed by the auditor.

Limited AFSL holders are required to complete and lodge:

  • Form FS76 – this form is an annual compliance certificate and requires the limited AFSL holder to provide a range of certifications on matters including client money, conflicts of interest, training, dispute resolution and risk management.

Ensure you review all forms prior to submission with ASIC to confirm all the information is correct. This includes the information that has been completed by your auditor. Instances have arisen where auditors have incorrectly filled out forms on the AFSL holders behalf which ASIC have recognised in their review of the documentation and subsequently raised questions. As a preventative measure, AFSL holders can send their completed forms to Sophie Grace for review prior to lodgement with ASIC.

  1. Keep accurate, easily accessible records

Not only is record keep a legal requirement, good record keeping practices will assist in the preparation of your financial accounts. Your auditor will ask for a variety of records in order to complete their audit – if these records are easily accessible and easily transferable to the auditor, the finalisation of the report can happen more quickly. It’s also a good idea to make sure these records are available to the relevant staff and they are able to respond to queries from the auditor efficiently.

  1. Be online

The FS70 and FS71 can be lodged online via ASIC’s AFS licensee portal. Ensure that you are registered to use this online portal and lodging your forms will be simple and efficient.

You can register for online access via ASIC’s website at the link: http://asic.gov.au/online-services/use-our-online-portals/register-for-online-access/

The FS76 cannot be lodged online at this stage and should be sent to ASIC by post. At the time of publication, ASIC was building an online service for future lodgements of the FS76.

Alicia Pevely

Alicia works with Sophie Grace Pty Ltd with a particular focus on compliance and legal services. She assists clients with AFSL and ACL applications, variations and also assists in the implementation of compliance reviews. She provides ongoing compliance support as well as assisting in the preparation of legal advice, commercial agreements and disclosure documents.