ASIC’s guidance to accountants. Is no news good news? Part 2

Prepared by Peter Hagias

ASIC issued INFO Sheet 16-425 late last year which provides unlicensed accountants and accountants operating under a limited AFSL with guidance on providing SMSF advice. However, sometimes what ASIC doesn’t say in its guidance is more interesting than what it does, and can be indicative of its policy indecisiveness.  Over three short information pieces we look at what ASIC didn’t discuss in its guidance. The next topic he looks at Audit Insurance:

Many practices offer audit insurance, which insures clients for professional costs incurred in relation to an audit, investigation or review by the ATO or a state-based revenue authority.

There have been some differing opinions, but the better one is that audit insurance products are financial products, and by offering and dealing in those products (i.e. arranging for a client to hold insurance, either individually or under a group policy held by the practice), the practice is engaging in various financial services, which usually require an AFSL. CO 08/1 provides relief in providing those services where the accounting practice is a group purchasing body and various conditions are satisfied.

However, that relief will not be available where the group purchasing body holds an AFSL or is an authorised representative of an AFSL holder. If you are in this basket, we suggest that you review your arrangements.