pencils-1238810_1280As the end of financial year has come and gone, audit time is fast approaching.  Sophie Grace has created a list of helpful hints to assist AFSL and Limited AFSL Holders in their preparation.

  1. Know the lodgement date

Lodgement dates for various types of AFSLs differ; therefore it is important that you know when your audit is required to be submitted to avoid potential breaches (which are reportable to ASIC) and late fees.

The varying lodgement dates are as follows:

  • If the entity holding the AFSL is a non-body corporate (e.g. sole trader) then your financial accounts are due within two months of 30 June (i.e.: 31 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 (i.e.: 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 (i.e.: 31 October).
  1. Contact your auditor

We suggest contacting your auditor now. This will allow you adequate time to prepare all the documents required for lodgement of your financial statements with ASIC. Recently, we have seen auditors increase their scrutiny on AFSL and Limited AFSL Holders. The documentation they require an entity to produce requires clear demonstration that compliance procedures have been implemented properly and carried out throughout the entire audit period. Collating the documentation can be time consuming, particularly in smaller businesses when there are not a lot of resources to dedicate to the AFSL audit or Limited AFSL compliance review.

  1. Know what needs to be submitted

It is important that you know and understand the documentation that needs to be submitted for your audit. AFSL Holders are required to submit the forms FS70 and FS71. Limited AFSL Holders are required to submit a form FS76.

The Form FS70 is a profit and loss balance sheet that provides ASIC with an outline of the current financial situation of the AFSL Holder. This form will also cover the specific requirements for Responsible Entities, Custodial and Depository Service Providers as well as OTC Derivative Issuers. An AFSL Holder’s financial statements must be attached to the back of the FS70. The Form FS71 is the audit report which is prepared and signed off by the auditor.

The Form FS76 is an annual compliance certificate and requires the Limited AFSL Holder to provide a range of certifications i.e. on client money, conflicts of interest, training, dispute resolution and risk management.

  1. Review documents prior to submission

Ensuring that you review all forms prior to submission is a necessity. All information that you submit to ASIC should be correct, including the information that has been prepared by your auditor.

If you require assistance in reviewing your financial documents prior to submission, Sophie Grace can provide you with this assistance.

  1. Make sure your records are easily accessible

Making sure your records are easily accessible will make the preparation for your audit quicker and simpler. Record keeping is also a legal requirement.

  1. Be online

ASIC is becoming increasingly tech savvy and electronic submission of forms is gaining popularity. The AFS Licensee portal on the ASIC website allows all financial statements to be lodged online.

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

Sarah Murray

Sarah works with the Compliance Team with a particular focus on compliance and legal services. Sarah also works with the Legal Team providing ongoing assistance in drafting and reviewing documentation as well as legal research. Sarah assists clients with AFSL and ACL applications, variations and also assists in the implementation of compliance reviews. She provides ongoing compliance support in the form of compliance program implementation and reviews.