What documents are you required to submit for your AFSL audit?

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workbook-1205044_1280Australian Financial Services Licence (AFSL) holders are required to have their financial statements audited and submitted to ASIC each year. The documentation required for your audit to be completed range from financial documents including balance sheets and cashflows to compliance policy documentation. It is important that all of your documentation is up to date and easily accessible to ensure the audit process is as smooth as possible.

  1. Financial Documents

The main part of your AFSL audit is ensuring you have met the financial obligations under the conditions of your AFSL for the financial year under review. All AFSL holders must:

  • prepare quarterly cashflow projections which cover the next three (3) months, demonstrating you have the ability to meet your anticipated expenses. If the tailored cash needs requirement applies to your AFSL, you will need to prepare monthly cashflow projections and these will need to be approved by your board of directors at least quarterly; and
  • prepare monthly balance sheets which show you have positive net assets.

Your AFSL auditor will request these at the commencement of the audit process. If you do not have an accountant who prepares these financial statements and keeps a record, you will need to ensure they have been completed and can be produced quickly and easily.

  1. AFSL Compliance Documentation

We are increasingly seeing auditors request the compliance policy documentation of AFSL holders. That generally means the auditor is seeking to conduct an overall review of the compliance procedures which are in place. This will include a review of:

  • your compliance policies and procedures
  • your compliance registers, including breaches, complaints, conflicts of interest
  • insurances including Professional Indemnity Insurance if required by your AFSL conditions; and
  • relevant registrations with ASIC and an external dispute resolution scheme if required.

Your AFSL auditor may also request to see copies of your compliance committee meeting minutes or board minutes to ensure the provision of your financial services is being carried out and overseen appropriately.

To ensure you are able to provide these documents to your auditor quickly and efficiently, we suggest commencing a review of all compliance policies and procedures to ensure they are up to date and in line with the current legislation and regulation.

Sophie Grace can assist in updating your compliance policies and procedures. Please contact us for further information.

About The Author

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Alicia Pevely

Alicia works across both Sophie Grace Pty Ltd and Sophie Grace Legal Pty Ltd with a particular focus on compliance and legal services. She manages the licensing and compliance aspects of the business. She is responsible for AFSL and ACL applications, variations and assists the compliance team in the implementation of compliance reviews. She provides ongoing compliance support and assists with the preparation of legal advice, commercial agreements and disclosure documents.  

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