In a recent survey of 326 accountants conducted by AccountantsDaily, 83 per cent of respondents said they do not believe the ATO’s vision of a standard chart of accounts is realistic.
In response, David Smith, founder and director of Smithink, defended the ATO’s vision, saying he believes there is confusion across the industry about what the ATO actually means by a standard chart of accounts.
“In the end I think the issue really is that there has been a lack of understanding about what they are actually talking about," he said.
“The ATO is not trying to take over the ledger… I think the end game is that we will see, inside small business ledgers, ATO identifiers classifying information – which is probably a better way of describing it than a chart of accounts.”
ATO deputy commissioner Steve Vesperman recently told AccountantsDaily that increasing automation and developing a standard chart of accounts are high priorities for the tax office but did not go into detail about what that means.
The ATO’s automation agenda is based on its XBRL (eXtensible Business Reporting Language) software on which Standard Business Reporting is built.
XBRL enables the tagging of data with identifying information, according to a classification system, or taxonomy. These tags associate the concepts in the taxonomy with a piece of data to facilitate the interpretation of the data.
Mr Smith said he understands accountants’ confusion about the issue but believes the final result will be widely welcomed by professionals across the industry.
“I actually think the ATO could have been a bit better in its communication about it, but in the end I think the issue really is that there has been a lack of understanding about what we are actually talking about.”
“When you look at the whole vision of XBRL (eXtensible Business Reporting Language), this whole Standard Business Reporting, that’s really what it was always about, creating these tags on accounts so that data could be easily identified,” Mr Smith said.
“All they want to do is to look at an account and say, What would that be equivalent to when we receive the information?
"How would they interpret the information in that account? – and that’s the end game.”
Sam Allert, Reckon's managing director, told AccountantsDaily he also believes the ATO’s vision is realistic.
“I'm a supporter of it," he said. "It’s possible but it’s hard, but often the right things for the long-term future are the hard things.
“Is it going to happen in one or two years? No – there is too much to change, from government legislation to software architecture to community awareness and business awareness. However, I support the government and believe they’re stepping in the right direction and Standard Business Reporting, using a standard taxonomy, is a great big step in that right direction.”
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