Tips for ensuring your audit documents are prepared and submitted on time

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Tian Qin

Tian assists with developing and implementing compliance policies and legal documents for our English and Chinese-speaking clients. Tian provides support to our compliance and legal teams with ongoing compliance and legal work. She also assists in conducting legal research and in the preparation of AUSTRAC registrations.


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To assist Australian Financial Services (“AFS”) Licensees and Limited AFS Licence Holders in their audit preparation, Sophie Grace has prepared the following checklist of important items to keep in mind as you prepare for your audit.

Know the lodgement date

Lodgement dates for AFS Licensees differ according to the entity which holds it.  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.

AFSL Type

Audit Lodgement Deadline

Body corporate that is not a disclosing entity

Within 4 months of the end of your financial year

Body corporate that is a disclosing entity

Within 3 months of the end of your financial year

Registered Schemes

Within 3 months of the end of your financial year

Non-body corporate (e.g. sole trader)

Within 2 months of the end of your financial year

 

Contact your auditor

We suggest contacting your auditor prior to the end of the financial year. This will allow you adequate time to prepare all the documents required for the audit process and lodgement of your financial statements with ASIC.

Auditors require documentation that clearly demonstrates compliance procedures have been implemented properly and carried out through the entire audit period. Collating the documentation can be time consuming, particularly in smaller businesses where there are fewer resources to dedicate to the AFS Licence audit or Limited AFSL compliance review.

Recently, we have seen auditors increase their scrutiny on AFS Licensees and Limited AFSL Holders for a number of reasons, including increased scrutiny of their work by ASIC and even litigation against them for alleged poor audit standards.

Know what needs to be submitted

It is important that you know and understand the documentation that needs to be submitted for your audit to avoid late fees, potential breaches and other possible penalties. AFSL holders are required to submit the forms FS70 and FS71. Limited AFSL holders are required to submit a form FS76.

Documents required

Description

Form FS70

·      a profit and loss balance sheet that outlines the current financial position of the AFS Licensee;

·      covers the specific requirements for Responsible Entities, Custodial and Depository Service Providers as well as OTC Derivative Issuers;

·      the AFS Licensee’s financial statements must be attached to the Form.

Form FS71

An audit report prepared and signed off by the auditor.

Form FS76 

Applies to Limited AFSL holders only.

·       an annual compliance certificate;

·       includes a range of certifications in relation to client money, conflicts of interest, training, dispute resolution and risk management.

Form 388

Applies to certain AFS Licensees including:

·      registered schemes;

·      trusts;

·      public companies;

·      large proprietary companies which are not disclosing entities;

·      small proprietary foreign-controlled companies.

·       a copy of the AFS Licensee’s financial statements, auditor reports and registered auditor information.

Different lodgement periods apply to Form 388, more information can be found at our dedicated page.

 

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.  Double check your forms to ensure they make sense and also align with your AFSL conditions and your financial statements.

If you require assistance in reviewing the forms prior to submission, contact Sophie Grace for assistance.

Make sure your records are easily accessible

Making sure your records are easily accessible will make the preparation for your audit quicker and simpler. Keep in mind that appropriate record keeping is also a legal requirement.

Lodge your accounts online

You must lodge your annual accounts online via the ASIC Licensees portal. To register for online access visit the ASIC’s website.

Further Reading

 

If you would like to discuss further how we can assist you, please contact us.

Tian Qin

Tian assists with developing and implementing compliance policies and legal documents for our English and Chinese-speaking clients. Tian provides support to our compliance and legal teams with ongoing compliance and legal work. She also assists in conducting legal research and in the preparation of AUSTRAC registrations.


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