Every accountant knows that audits or reviews of your client’s tax returns, or financial compliance obligations can sometimes be unavoidable.
When an audit hits, this is rarely a reflection of the work put into preparing the return and is more often due to a specific crackdown by the Australian Taxation Office (ATO) or other government revenue authorities. The below pie chart shows the distribution of Audit Shield claims activity in Australia between 1 July 2021 – 30 June 2022*:[* Correct as at July 2022.]
The Accountancy Insurance Claims Department continues to be busy processing claims from client accounting firms across Australia. Between 1 July 2021 – 30 June 2022, the six most frequent claim types among accounting firms offering Audit Shield in Australia were Employer Obligations audits and reviews (PAYG/SG/FBT), Income Tax (Full/General/Combined) audits and reviews, ATO (High Wealth) audits and reviews, Payroll Tax Investigations (All States), BAS audits and reviews (Pre & Post Assessment), and Income Tax (Rental Property).
For the detailed insights into the drivers behind these claim types read the blog: www.accountancyinsurance.com.au/claims-activity-2021-22/
Audit activity outside of the accountant’s control
There are many ATO, State and Federal government revenue authority audits and reviews (including three of the six highest claim types noted) where quite often the accountant only becomes involved after the government revenue authority initiated audit activity has started.
To put that into some perspective, nearly 50% of the audit activity our claims department recorded in the 2021-22 financial year were for claim types where the taxpayer (your client) and/or a bookkeeper may have prepared the lodged returns or managed the employer obligations compliance that were under audit. Here is a breakdown of those figures:
- Employer Obligation Audits and Reviews – 13.47%
- BAS Audits and Reviews – 8.88%
- Payroll Tax Investigations – 10.32%
- WorkCover – 3.71%
- ATO Excess Super Contributions – 5.57%
- Land Tax – 3.38%
- Covid-19 ATO JobKeeper Payment Audits – 2.31%
- Stamp Duty – 1.28%
About Accountancy Insurance:
The team at Accountancy Insurance have been perfecting tax audit insurance for almost 20 years. In that time, we have learned a thing or two about what accounting professionals are looking for to protect their firm and save their clients’ money.
One thing is clear, merely directing your clients to a broker’s website is not sophisticated, clever, or innovative.
Besides offering broad policy coverage, our more than 3,700 partnering accounting firms also experience the latest technological smarts and secure processes in the delivery and maintenance of their Audit Shield program.
We continue to develop and evolve our practice management integrations that will make our renewal processes even more efficient while never standing still in seeking out the best solutions available for business intelligence, security, compliance, tools, and more.
Being serious about technology is one thing but we also know the importance of genuine, hands-on assistance and probably the most important thing for us, is our focus on hands-on delivery. We still front our service offering with the simplicity of people who make it happen for you. All while you stay in control.
From initial sign-up, to your renewals, to claim finalisation, we keep you covered – year after year.
That’s just part of the Audit Shield experience.
To find out more visit: https://www.accountancyinsurance.com.au/
Rod Spicer, associate director, Accountancy Insurance
Roman Kaczynski, director, Accountancy Insurance
- Audit Shield claims activity across Australia 2021-22 - 18 July 2022
- Predicted ATO audit activity trendsfor 2021 & 2022 - 17 August 2021
- Tax audit claim stats all accountants in Australia will want to know - 14 July 2021