Accounting Services
Browse the latest accounting developments, trends, standards and opportunities in the Australian Accounting industry from accountants and accounting associations on Top4 News.
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Big four accounting firms avoid scrutiny in multinational tax avoidance

Big four accounting firms avoid scrutiny in multinational tax avoidance | Accounting Services | Scoop.it

The Senate Inquiry into corporate tax avoidance is due to hand down its final report by April. One of the lesser-mentioned groups appearing before 2015’s Senate hearings are Australia’s big four accounting firms.

 

Multinational companies like Apple, Chevron, Google, Microsoft, and News Corp have dominated headlines, but little has been said of the role of PwC, KPMG, Deloitte and EY. After all, it is the big four firms that audit the accounts of leading multinational companies and render assistance with their taxation affairs.

 

The big four firms claim they are supporters of transparency because it is fundamental to building public trust and confidence in the accounting profession.

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KPMG's new auditors don't have accounting degrees

KPMG's new auditors don't have accounting degrees | Accounting Services | Scoop.it

KPMG's highly conventional audit division has broken a 100 year tradition and hired 42 graduates without a business or accounting degree. It is a massive expansion of a radical experiment trialled for the first time last year.

 

Just over a third of KPMG's 390 audit graduate intake in 2016 do not have an accounting background. The shake-up in graduate recruitment is the latest in a series of radical changes in KPMG's audit division in recent years driven by continued margin pressure.

 

"The way we conduct company audits today is completely different from five years ago," KPMG head of innovation Ken Reid said.

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Lower payroll tax receipts pose fresh threat to budget bottom line

Lower payroll tax receipts pose fresh threat to budget bottom line | Accounting Services | Scoop.it

Lower than expected payroll tax receipts are threatening to inflict another blow on WA's already precarious budget position, Treasury officials warned.


On the back of a massive decline in the state's financial position in recent years, due in large part to falling royalty revenue, Under Treasurer Michael Barnes admitted payroll tax issues could now put a further hole in the budget.


Mr Barnes told a parliamentary committee hearing those payroll tax estimates released just a month ago now could be overly optimistic.

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One of Australia's accounting firm announces rebrand

One of Australia's accounting firm announces rebrand | Accounting Services | Scoop.it

Canberra based accounting firm Joyce Dickson has announced that it will undergo a rebrand to coincide with relocation and its partnership with a prominent international accounting network.


Following its alignment with global accounting alliance MGI in February 2015, Joyce Dickson has announced that it will rebrand the firm to MGI Joyce Dickson, as well as relocate to new premises in order to accommodate growth.


Grant Field, chairman of MGI Australasia stated that the rebrand and expansion of MGI Joyce Dickson coincided with a year of strong growth for the MGI Australasian network as a whole, and flagged New Zealand expansion as a target for 2016.

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Fin-tech company goes on a hiring blitz after $US10M capital raise

Fin-tech company goes on a hiring blitz after $US10M capital raise | Accounting Services | Scoop.it

British-based fin-tech company Receipt Bank will hire 15 sales staff in Sydney sales after closing a US10 million series A capital raising.


"This announcement demonstrates the next stage of maturity of the cloud accounting community to scale and innovate," Receipt Bank Australia and New Zealand country manager Sophie Hossack said.


This type of automation is one of the most disruptive forces in the global accounting profession. While the learning curve has been painful for some conventional Baby Boomer practitioners, cloud-based software systems like Receipt Bank and Xero are generally perceived as a force for good, allowing accountants and bookkeepers to complete compliance activities faster and cheaper.

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Accountants optimistic about 2016 pay rise, research shows

Accountants optimistic about 2016 pay rise, research shows | Accounting Services | Scoop.it

Expectations for a salary increase are high in the accounting industry, according to a recruitment consultancy firm survey, with the majority of accounting professionals expecting a pay rise this year.


The Robert Walters’ Salary Survey 2016 report indicated that 83 per cent of accounting professionals are expecting a pay rise this year, compared to 76 per cent of professionals in banking and finance. However, according to the report, salaries for Sydney tax accountants are expected to remain broadly the same.


In terms of recruitment, the report said the market for accounting and finance professionals was largely buoyant throughout 2015. The research said companies this year will “seek to hire commercially aware accountants with strong technical skills who can advise on financial issues at a senior level”.

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Accountants urged to consider cyber insurance

Accountants urged to consider cyber insurance | Accounting Services | Scoop.it

Accountants have been warned of their digital complacency, and urged to consider cyber insurance in order to protect the sensitive information at their disposal.


“Accountants, along with the rest of the global community, have no choice but to be involved in the digital space in some capacity or another.” said Karen McDonald, associate director of professional risks at Accountancy Insurance.


Ms McDonald said firms must be aware of the hefty fines associated with a breach of the Australian Privacy Principles, and to consider the downtime that can affect their business as a result of a cyber breach.

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Treasury backs spending brake, warns of debt complacency

Treasury backs spending brake, warns of debt complacency | Accounting Services | Scoop.it

Treasury secretary John Fraser has backed the idea of imposing a limit on government spending of 25 per cent of gross domestic product and warned against community and political complacency over the likely cost of funding the growing debt burden. He said a return to more long-run borrowing costs could see the Commonwealth's interest rate burden blow-out by $29 billion over three years.


"Simply increasing the overall tax burden to raise more revenue is not the answer," he said in a speech in Sydney on Thursday night aimed at laying markers for coming May budget.

He said a substantial amount of the temporary revenue windfall was used to lock-in long-term spending, a sign that the size of government is now close to a historical high.

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Advisers urged to prepare for accounting changes on leases

Advisers urged to prepare for accounting changes on leases | Accounting Services | Scoop.it

Advisers and other small business owners need to act now to avoid falling foul of their debt-covenants due to changes in accounting practices due to come into effect from 1 January 2019..


Crowe Howarth audit technical director, Ralph Martin, added that the new standard could require some businesses to adjust their accounting systems to capture the required data, while the reclassification of rent into a mixture of ‘depreciation' and ‘interest' could have an impact on earn-out arrangements based on earnings before interest, taxes, depreciation and amortisation (EBITDA) multiples.


He also noted that the replacement of the current straight-line expenses approach of operating leases with front-loaded recognition of interest expense could affect the timing of earnings associated with major projects and asset groups.

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Financial advisers say wealthy will accept super tax hike

Financial advisers say wealthy will accept super tax hike | Accounting Services | Scoop.it

Australia's richest families are mostly accepting of the idea that the current tax incentives need to be be better targeted. Financial advisers to some of Sydney and Melbourne's richer families say they believe their clients mostly accept that tax incentives on superannuation need to be be better targeted even though are likely to have to pay more tax.


"I really don't see a lot of opposition among my clients to the idea that they should have to pay slightly higher taxes on their super," Integral Private Wealth director David Simon said.


"It is important that any changes are part of a comprehensive tax reform package, rather than just plundering super to pay for budget deficits." Mr. Simon said.

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Tax financial advisers warned to stay within scope

Tax financial advisers warned to stay within scope | Accounting Services | Scoop.it

Tax financial advisers have been warned to stay within the scope of the tax advice they are registered to provide, or risk litigation from clients in later years.


DBA Lawyers director Daniel Butler told AccountantsDaily’s sister publication SMSFAdviser that with the number of financial advisers registered as tax financial advisers now fast approaching 17,000, it is vital these advisers ensure the tax advice they are giving is competent, and that they are staying within the realms of the tax advice they can legally provide.


Mr Butler said while the Tax Practitioners Board will easily catch out any advisers completing tax returns when they are not licensed or registered to do so, when it comes to providing tax advice, it’s more likely to be clients that get the financial adviser into trouble.

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Accountants urge wealthy to top up super before budget changes

Accountants urge wealthy to top up super before budget changes | Accounting Services | Scoop.it

Accountants are encouraging high net worth clients to top up their super before the May federal budget, saying it could be the equivalent of 2007's one-off $1 million top-up opportunity.


The use of family trusts to minimise tax and build wealth is also expected to surge as the government continues to reduce the amount that can be injected into superannuation accounts.


HLB Mann Judd wealth management partner Michael Hutton said clients had been moving money into family trusts since the government lowered the contributions threshold to $35,000 a year (for those over 50 years old, or $30,000 for those under 50).


"People are unsettled about talk about changes to pensions," Mr Hutton said.  "They're moving towards family trusts which have the added benefit of the money not being locked away, no contribution limits, the ability to split income to get a tax benefit, and it survives you upon death unlike super which has to be paid out."

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Goodwill model 'losing its appeal'

Goodwill model 'losing its appeal' | Accounting Services | Scoop.it

The goodwill partnership model traditionally used by accounting firms is waning in popularity as buy-in prices in many firms become too great.


BOQ Specialist's Ryan Painter told AccountantsDaily the lender has noticed a marked reduction nationally in firms using the goodwill model.


“The smaller firms are still on the traditional goodwill model and it lends itself to up to 8 or 9 partners; thereafter, it becomes very difficult,” he said.


“Traditionally, it has been the cornerstone for value transfer in the accounting profession. However, I think as average fees have gone up and the appetite for unsecured lending has diminished, it's becoming harder and harder to fund.”

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Accountants lack confidence to offer advisory services, research claims

Accountants lack confidence to offer advisory services, research claims | Accounting Services | Scoop.it

New research has revealed the struggles accountants and their firms face in their journey to incorporate advisory service offerings into operations.   The Accountants Research Report 2016, conducted.


Bstar's Accountants Research Report 2016 indicated that 81 per cent of accountants continue to lack confidence in their ability to deliver advisory services, a sentiment due largely to a lack of knowledge regarding the characteristics of their clients and their firms as a whole.


Fifty-seven per cent of respondents revealed that they had indeed appointed an independent adviser to assist their growth and operations, representing year-on-year growth of 39 per cent from the 2015 findings.

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Tax breaks for savers 'essential'

Tax breaks for savers 'essential' | Accounting Services | Scoop.it

The financial services industry challenged the federal government to come clean on the impact of superannuation tax hikes.


"The first question we'd be asking is, 'how many more or fewer people will be on the pension as a result'. Tax incentives for middle Australians [to save] are essential." said Andrew Bragg, director of policy for the Financial Services Council (FSC).


Mr Bragg said 80 per cent of retirees would still be reliant on the pension by 2050 and "we need to find a way to encourage middle Australians to save and to become self-sufficient. Raising the GST is seen as unfair to poor households and requires compensation in the form of increased benefits, but most super tax reform proposals would tax upper income earners more heavily.

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Accountant charged following ASIC investigation

Accountant charged following ASIC investigation | Accounting Services | Scoop.it

A former director, described by ASIC as an SMSF accountant, has been charged with 23 criminal counts including making false and misleading statements and fraudulently misappropriating money.


Nicholas James Ellis appeared before the Downing Centre Local Court and was charged with 12 counts of making false and misleading statements and nine counts of fraudulently misappropriating money, according to an ASIC statement released this afternoon.


ASIC also alleged that approximately $250,546 of the misappropriated investor funds were used to pay out investors in a previous investment run by Mr Ellis that had failed.

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Tax announcement ‘only a baby step’

Tax announcement ‘only a baby step’ | Accounting Services | Scoop.it

Recent global agreements to confidentially share tax information between 31 countries have been blasted by Oxfam Australia as “only a baby step towards greater tax transparency.


Joy Kyriacou, Oxfam Australia’s finance for development manager, stated that much more needed to be done in order to create a more just tax system and that confidentially disclosing the tax information on multinational companies served as an inadequate measure of reform.


Ms Kyriacou went so far as to deem “financial secrecy” at the heart of “the vastly unequal world in which we live today”, noting that many companies will avoid the changes altogether since they do not meet the global revenue requirements of $1 billion.

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Broome accountant accused of stealing more than $2m

Broome accountant accused of stealing more than $2m | Accounting Services | Scoop.it

An accountant who sat on school and junior sport association boards is accused of siphoning $2.1 million from local businesses he worked for in the northern Western Australian town of Broome. Wayne Peter Lynch has been charged with 119 counts of stealing as a servant.


It was alleged the bulk of the money was stolen from the local business McCorry Brown Earthmoving, where he had been employed as financial controller for about 18 months.


The company confirmed Lynch was stood down late last year as the police investigation got underway.

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Automation can’t beat accountants

Automation can’t beat accountants | Accounting Services | Scoop.it

Accountants will not be replaced by computerisation as automated data entry cannot replicate lateral and creative thinking, MGI believes.


The accounting, tax, and audit alliance said while accounting records would largely be created with very little manual input in the future, accountants would still be needed.  Good accountants operate as a strategic partner in businesses that offer insight into what the financials mean.


"While numbers are certainly meaningful in a business, in isolation they are not particularly helpful. An accountant's familiarity with the specific goals and intricacies of your business cannot be replaced by software," MGI Adelaide's director of taxation, Maree Caulfield, said.

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Accountants facing succession crisis, claims business broker

Accountants facing succession crisis, claims business broker | Accounting Services | Scoop.it

Connect CEO Paul Tynan said succession and retirement planning for the accounting profession has never been more important as it is at present. Unable to find a buyer, many public practice accountants will simply switch off the lights and walk away from their accounting practice into an uncertain and underfunded retirement future, warned Mr Tynan.


“We are seeing fewer X and Y generation members wanting to move into business ownership for one main reason: this generation is burdened with debt. They have school fees, lifestyle expenses, house loan repayments, marriage costs, children to fund and, as a result, have no money left for business debt!” Mr Tynan said.


Mr Tynan said this means traditional succession plans are no longer appropriate in many cases and accountants must rethink their options. Despite this, Mr Tynan said there is still much value in accounting practices and principals who embrace the current environment can put themselves in a great position to capitalise on their hard work when it comes time to sell.

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Tax office tipped to release new ruling

Tax office tipped to release new ruling | Accounting Services | Scoop.it

The ATO will release a public ruling on a transition to retirement income stream (TRIS) strategy involving payments being taxed as a lump sum, Colonial First State has predicted.


Colonial First State executive manager Craig Day said the ATO will be considering how it can efficiently respond to all these requests and will look to release further guidance to clarify the issue rather than having to deal with a large number of PBR requests separately.


He also warned that if the ATO concludes that treating TRIS payments as a super lump sum for income tax purposes does affect the amount of exempt current pension income, then this could also impact a fund’s ability to claim exempt current pension income where they have taken a commutation out of the fund.

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ATO seeks owners of boats, planes, horses

ATO seeks owners of boats, planes, horses | Accounting Services | Scoop.it

The Tax Office is looking closer into the tax affairs of rich people who may have purchased fancy boats, planes, cars, art and thoroughbred horses. It has launched a data-matching program where it will contact insurers to identify policy owners of various classes of insured assets that are often associated with wealth.


It will allow the ATO to make more accurate estimate of peoples' wealth to ensure they meet their tax obligations.


Tax adviser to many of Melbourne's wealthy, Marin Accountants founder Bernard Marin, said: "This is just another example of the ATO's enthusiasm to ensure nothing falls through the cracks. It wants to ensure that rich get caught up in the loop."

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Lease accounting standards will shift debt back to companies

Lease accounting standards will shift debt back to companies | Accounting Services | Scoop.it

Long-awaited leasing accounting rules will affect roughly half of all listed companies and bring billions of dollars worth of debt onto balance sheets.The new rules released by the International Accounting Standards Board, which take affect from January 1, 2019 are expected to transfer about $4 trillion worth of off-balance sheet debt liabilities onto companies' books.


Australia is committed to adopting IASB standards and the IFRS 16 rule will be considered by the Australian Accounting Standards Board at its February 23 meeting.


"This won't have much of an impact among the big users of leasing aside from putting some discipline around that calculation," Australian Equipment Lessors Association director Ron Hardaker said.

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Count outlines fee-for-service approach

Count outlines fee-for-service approach | Accounting Services | Scoop.it

Margin for error is a vital part of any fee-for-service financial advice model, according to an analysis published by Count Financial Limited.  


In an article aimed at informing its member accounting firms, Count has cited the fee for service methodology used by accounting and wealth management firm, Cox Partners arguing that as well as ensuring price transparency for clients, this [fee for service] model enables advisers to price each service based on the complexity of work required.


According to Lewis his firm breaks it fee-for-service approach into eight parts:

1. The initial consultation

2. Data collection and entry

3. Creating the advice strategy

4. Preparing the advice

5. Compliance

6. Implementing the advice

7. Confirmation from the client

8. Advice completion.

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A quarter of accountants to miss licensing deadline

A quarter of accountants to miss licensing deadline | Accounting Services | Scoop.it

A leading industry figure has warned that up to a quarter of accountants will simply not be ready for the end of the accountants' exemption come 1 July 2016.


Greg Hayes, director of accounting and advisory firm Hayes Knight, told AccountantsDaily he predicts that a significant portion of accountants will simply not be ready with their licensing and authorisation processes, with a flurry of activity to take place in late June and early July.


“My best estimate at this stage is that 20 to 25 per cent of the eventual market that is to be covered under an authorisation or a licence won’t be ready by 1 July,” Mr Hayes said.


“That will possibly drip through into the third quarter of next year, and possibly even a small amount into the fourth quarter of next year,” he added.

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