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Does the accounting industry have a fear of digital technology? 

When it comes to business, technology is by far one of the biggest changes over the past few decades and with many businesses moving to the cloud, there appears to be a reluctance for the accounting industry to follow their advice to clients and do the same.

With over 9,500 accounting firms in Australia, only a small percentage have migrated their systems to the cloud and their reluctance to move could be a threat to their capabilities in the long term.

A government report titled 'Technology and Australia’s Future' published in September 2015 has found there is trepidation of digital technology in the accounting industry.

Accounting firms quite commonly need to store thousands of emails on servers, and the reluctance to move to the cloud can mean that safe storage equates to a relatively high expense for traditional server space.

On top of this, the accounting industry’s reluctance to embrace the powers of Google’s G Suite and Microsoft 365 is proving to create some serious issues regarding inefficiencies.

The major concern is security and protecting data, yet with Google’s G Suite and Microsoft’s Office 365 capabilities businesses need not have any concern with some of the world’s latest and sophisticated technology being used to power the platforms.

 A key reason that has been found for the slow take-up of digital technology is the delay or reluctance for technology adoption in accounting firms. This could be either the firm simply doesn’t know about digital technology, or there is an ignorance to take up technology within the firm due to the fact they aren’t fostering close relationships with IT experts.

Added to the fact that management is largely dominated by baby boomers and practitioners over the age of 50, the threat of late adoption of digital technology is a serious issue within the industry as a whole.

With unprecedented growth in digital technology, the accounting industry should be looking to embrace the following:

-    Update exchange servers to cloud-based technology
-    Embrace applications
-    Explore ancillary products
-    Explore practice management software
-    Set up automation 

For more information on the report visit here
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Accountants to up their game on cyber threats

With the threat of cyber attack on the increase, accountants and auditors should be aware of the need to manage cyber risks as part of their daily business operations. 

With cyber attacks an issue of national security, Australian businesses should be aware that the risk is increasing and business should be taking steps to ensure they adapt and put in place systems to cope with cyber crime.

Organisations should be purchasing security products that protect the business environment and provide the sophisticated protection required to combat cyber attacks.

Accounting firms should consider the following three things to protect their business from cyber attacks:

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ATO Report Released - Top Contravention Areas for SMSF

The ATO has released valuable data that outlines where the highest proportion of contraventions occurred in the previous financial year and how many have since been rectified.

The review has shown that 7,900 SMSF's had auditor contravention reports lodged with a total of 20,500 contraventions.

The report shows there has been a decrease compared to the previous year of 4% in the number of SMSFs with an ACR and a decrease of contraventions by around 7%. Just under half of those contraventions reported to June 2016 were reported as rectified.

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Crack down on auditor independence by ATO for 2016/17 FY

The ATO has been clear that risks to independence are a focus in the 2016-2017 financial year, as is the assurance that SMSF auditors are complying with all of the independence requirements set out by the APES Code of Ethics for Professional Accountants.

Here are a number of key threats to auditor independence which are being focused on by the ATO in the current financial year:

Self reviews
This is the threat of an SMSF auditor who also acts as a tax agent for the fund. Self-reviews are a threat to independence and auditors are required to safeguard independence and remove themselves when they are concerned about compliance.

Reciprocal audits
The process where an auditor will audit their auditor’s fund. This process can lead to self-interest threats and creates a disincentive to question the other practitioner’s work. ASIC and the ATO have an issue with reciprocal audits and require a third party that is independent to undertake an objective audit.

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