In addition to the CPA Australia By-Laws, a public practitioner may be required to satisfy a number of licensing requirements and other regulations when conducting public accounting services, depending on the services offered.

Separate licensing or registration requirements must be met where a practitioner intends to practice as:

  • a Registered Tax Agent, BAS agent or Tax (Financial) Adviser
  • a Registered Company Auditor
  • a Self-Managed Superannuation Fund Auditor
  • a Liquidator or a Registered Trustee in Bankruptcy
  • an Australian Financial Services (AFS) licence holder.

Understanding your obligations in these areas will assist you in identifying the appropriate criteria you need to meet in order to provide the services you wish to offer as a practitioner.

Tax agent services regime

The tax agent services regime regulates the registration of three discrete categories of tax practitioners:

  • tax agents
  • BAS agents
  • tax (financial) advisers.

The legislation regulating tax practitioners is principally contained in the Tax Agent Services Act 2009 (TASA), although various transitional issues are separately dealt with in the Tax Agent Services (Transitional Provisions and Consequential Amendments) Act 2009.

The Tax Agent Services Regulations 2009 sets out the academic qualifications and practical work experience requirements that must be satisfied for a person to be a registered tax agent, BAS agent or tax (financial) adviser as well as various other administrative rules.

Sole practitioners, partnerships and companies are all potentially eligible for registration as a tax agent under the TASA. In addition, individuals or companies acting in the capacity as a trustee are also eligible to register as an individual or corporate tax agent although no registration can be issued to a trust as a separate entity. Partnerships of trustees of discretionary trusts are also viable practice structures under the regime where each individual or corporate trustee is registered as a tax agent and is a partner under a registered partnership.

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Audit engagements

To undertake an audit of the financial reports prepared under the Corporations Act 2001 (the Act) of a:

  • public company
  • large charity (revenue of $1 million or more)
  • company limited by guarantee (with revenue or group consolidated revenue of $1 million or more), or where a registration requirement arises from a member or by an ASIC direction)
  • registered scheme
  • disclosing entity
  • large proprietary company or a small proprietary company (only if at least 5 per cent of shareholders have given a direction to prepare a financial report and to have it audited), or 
  • an incorporated association (thresholds vary for associations incorporated under state or territory legislation)

you must be registered as a company auditor (RCA) by the Australian Securities and Investments Commission (ASIC).

The auditor may also be an Authorised Audit Company or an Audit Firm with at least one member who is an RCA and who is ordinarily resident of Australia.

Who can undertake audits of non-corporations law entities, such as incorporated or unincorporated entities, varies considerably and will depend on a number of factors. In addition, some companies limited by guarantee, incorporated associations and charities are permitted to have a review rather than an audit of their financial report.

An individual seeking to register as a company auditor must be registered with ASIC. If a partnership is appointed auditor of a company registered in Australia, all the partners who are registered company auditors are deemed to be appointed, under section 324AB of the Act. Audit firms (partnerships) do not need to be formally registered with ASIC, but at least one member of the firm must be a registered company auditor.

Authorised audit companies must be registered with ASIC. A company can carry out and prepare an audit and auditor’s report if the company is an authorised audit company.

The trust entity itself cannot register as an auditor. However, the trustee can register if it meets all the other registration requirements. If a partnership of discretionary trusts is appointed auditor of a company registered in Australia, all the trustees of the partners who are registered company auditors are deemed to be appointed, under section 324AB of the Act.

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SMSF auditors

Under the Superannuation Industry (Supervision) Act 1994 (the SIS Act), all self-managed superannuation funds (SMSFs) must be audited annually by an approved SMSF auditor. An approved SMSF auditor is a person registered with ASIC under section 128B of the SIS Act.

The Australian Securities and Investments Commission (ASIC) must be satisfied that the applicant is a fit and proper person who is not subject to a disqualification or suspension order. ASIC may impose conditions on a person’s registration as an approved SMSF auditor at any time including, completing a training course or passing a competency examination within a specified timeframe. Approved SMSF auditors must also comply with the ASIC competency standards in ASIC Class Order CO 12/1687 Competency standards for approved SMSF auditors.

Approved SMSF auditors must:

  • provide ASIC with an annual statement
  • undertake required CPD
  • comply with ASIC competency standards, AUASB standards and APES 110 Code of Ethics for Professional Accountants
  • hold a current policy of PI insurance
  • notify ASIC of a change in their circumstances
  • complete the ATO form, Self-managed superannuation fund independent auditor’s report (NAT 11466), when reporting on audits of SMSFs.

If the auditor has identified contraventions and other important matters to report during the audit, they must lodge an auditor/actuary contravention report (ACR) via the ATO’s online electronic superannuation audit tool (eSAT). 

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Assurance practitioners undertaking review engagements

Companies limited by guarantee, with revenue or part of group consolidated revenue more than $250,000 but less than $1 million and that are not a Commonwealth company or subsidiary, can have their financial report reviewed, rather than audited.

Small companies limited by guarantee do not need to have their financial report audited or reviewed but may elect to do so if directed of at least 5 per cent of the members. A ‘small company limited by guarantee’ is defined as a company:

  • limited by guarantee for the whole of the financial year
  • that was not a deductible gift recipient at any time during the financial year
  • with revenue of less than $250,000 or, if included in consolidated financial statements of a consolidated entity, with consolidated revenue of less than $250,000
  • with certain exceptions (see Corporations Act s.45B).

An auditor does not need to be a registered company auditor to perform a review engagement, however, generally they need to be a member holding specified designations from one of the three professional accounting bodies in Australia and must meet competency requirements.

Similarly, charities registered with the Australian Charities and Not-for-profits Commission (ACNC) and certain associations incorporated with revenue more than $250,000 but less than $1 million may elect for a review rather than an audit and those with revenue under $250,000 have no audit or review requirements.

Members conducting review engagements, who are not RCAs, are required to meet competency requirements. These members need to have, and be able to demonstrate, competencies in five key areas.

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Assurance practitioners undertaking other engagements

Certain other audit or assurance engagements require specific registrations and the practitioner should make sure that they hold any relevant registration when accepting each engagement. Registrations are required for the following engagements:

Clean Energy Regulator schemes

Audits under schemes administered by the Clean Energy Regulator, including the Emissions Reduction Fund, the National Greenhouse and Energy Reporting scheme, the Renewable Energy Target and the Safeguard Mechanism, must be conducted by a registered greenhouse and energy auditors. To be eligible to register auditors must demonstrate their knowledge of the relevant legislation as well as their knowledge of and experience in auditing. Details on the types of knowledge and evidence are laid out in the National Greenhouse and Energy Reporting (Auditor Registration) Instrument 2018.

Legal Practitioners’ Trust Accounts

External examiners are required to conduct legal practitioner trust account examinations, the requirements for which are set out under relevant legislation in each state or territory. For legal practitioner trust accounts in Victoria and New South Wales, the Legal Professional Uniform Law and Legal Profession Uniform General Rules 2015 provides the classes of person who may be appointed as an external examiner, including members of an Australian accounting body holding a public practice certificate and RCAs, all of whom must complete the required course of education. To find out more, visit the Victorian Legal Services Board and Commissioner or the Law Society of New South Wales.

Other Australian states have similar requirements for external examinations:

Unions and employer associations financial reports

Audits of unions and employer associations’ financial reports under the Fair Work (Registered Organisations) Act 2009 must be registered auditors with the Registered Organisation Commission.

Undertaking liquidations and being a trustee in bankruptcy

If you wish to undertake a company liquidation, you must be registered as a liquidator. If you wish to act as a trustee in bankruptcy, you must be registered as a trustee in bankruptcy.

The appointment of liquidators is regulated by Insolvency Practice Rules (Corporations) 2016, consequential to the passing of the Insolvency Law Reform Act 2016 (Schedule 2, in particular), referring in particular to Division 20 – Registering liquidators. Section 600K inserted into the Corporation Act 2001 gives recognition and effect to the Practice Rules from 2017.

The appointment of a trustee in bankruptcy under the Bankruptcy Act 1966 has been subject to similar reforms given effect through the Insolvency Law Reform Act 2016 (Schedule 1, in particular). The Act provides for four types of practitioner administering personal insolvencies:

  • registered trustees
  • controlling trustees
  • registered debt agreement administrators
  • official trustee in bankruptcy.

An individual applying to be a trustee in bankruptcy must apply for registration in an approved form to the Inspector General in Bankruptcy. The Inspector General will establish a committee to consider the application. The reforms brought about by the passing of the Insolvency Law Reform Act 2016 are underpinned by Insolvency Practice Rules (Bankruptcy) 2016, which align qualification, experience and other relevant attributes.

The positions of trustee in bankruptcy and liquidator are personal appointments. For partnership, company and trust entities, individual partners may be registered but not the partnership or company as a whole. The trust entity itself cannot register as a trustee in bankruptcy or a liquidator, however, the trustee can if it is an individual. Registration of a liquidator can be limited to acting as liquidator for the body corporate specified in the certificate of registration.

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Providing financial planning advice

Financial planning advice is a highly regulated industry, particularly when it comes to providing financial advice to the public. Before you can provide advice that could influence a client's decision to purchase a financial product, you must meet minimum training standards and hold an Australian Financial Services (AFS) licence or be authorised as a representative of an AFS licence holder.

A new education, training and ethical standards regime for financial advisers commenced on 1 January 2019 under the Corporations Amendment (Professional Standards of Financial Advisers) Act 2017.

The new regime is governed by the Financial Advisor Standards and Ethics Authority (FASEA).

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Providing superannuation advice

See CPA Australia’s guidance on the regulation of SMSF advice.

Providing credit advice or assistance