Sometimes we hear a few misconceptions about the tax audit insurance offering, Audit Shield.
Here are a few common myths and explanations.
Myth 1: “Audit Shield only covers audits”
The comprehensive policy covers all audits, enquiries, investigations and reviews instigated enquiries and audits instigated by the Australian Taxation Office (ATO) and other federal, state and territory government agencies. All previously lodged returns are covered too as long as the client has Audit Shield cover in place at the time the notification of the audit is issued.
Myth 2: “A ‘data dump’ will be completed and I will need to give sensitive information about my clients to a third party”
In the initial data review only basic client information is required (no financial information at all). Absolutely no information regarding your clients is provided to third parties or used for any other purpose than a data review between an Accountancy Insurance Account Manager and your firm to ascertain their category level.
Myth 3: “I don’t need Audit Shield. I am a good accountant”
The Federal Government will provide $77.8 million over four years to the ATO to expand data matching with third party information and check 640 million transactions* which is forecasted to generate revenue of $610.2 million over the forward estimates period**. These transactions will not discriminate between ‘good’ and ‘bad’ accountants and do not reflect on the abilities of an accountant. Once the Audit Shield policy is in place, accountants and clients alike are relieved with the peace of mind that Audit Shield provides. It is also comforting for clients to see that their accountant is being proactive – and a ‘good’ accountant – with their service offerings.
To learn more about Audit Shield visit www.accountancyinsurance.com
* Australian Taxation Office’s Compliance in focus 2013-14
** Australian Government – www.budget.gov.au
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