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Latest AFSL crackdown a warning to accountants

Following licence cancellations last week, it is clear ASIC isn’t holding back on cancelling AFSLs that don’t comply with their audit requirements, sending a warning to recently licensed accountants.

Tax&Compliance Lara Bullock 27 March 2017
— 1 minute read

Last week, two financial planners had their AFS Licences cancelled by ASIC and one had his licence suspended, all for failing to lodge annual financial statements and auditor's reports.


Sophie Gerber, director of financial services consultancy firm Sophie Grace, told Accountants Daily that audits are an important part of having and keeping an AFSL despite the financial burden they can hold.

“Unfortunately what people, who are going in to have their own licence, struggle with is that an audit can be expensive relative to other costs,” she said.

“It might be anywhere between $6,000 and $10,000 a year, but they need to factor that into their business costs because they have to get it done.”

Historically, Ms Gerber said that ASIC hasn't closely monitored the audits of licensed financial planners. However, ASIC is now cracking down.

“There have been some licensees that have never done it, and they never had someone come and ask them questions about it,” she said.

“Now ASIC has done this whole project, and what seems to have happened over the last year or two is that they are progressively cancelling these people.”

Mr Gerber said this should come as a warning to accountants who have recently become licensed or are in the process of getting their licence.

“The accountant regime is really still at the beginning. The credit regime started in about 2009, and they've only really started pushing people and looking at it more closely in the last year or two,” she said.

“So I think there's a few years in the system for accountants to get their act together, but it's certainly no excuse for not starting now.”

“ASIC is being harder on licences, so people need to start preparing now and not try to cut costs on it.”

Latest AFSL crackdown a warning to accountants
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