Recent data from a local Auditor would suggest that there has been a rise in audit activity by the QBCC. Are you at risk of getting an audit? And would you be able to provide all of the relevant information to the QBCC in the event you were selected for an audit?
With the changes to the QBCC's Minimum Financial Requirements (MFR) Policy in 2014, it would appear that some license holders have seen their annual renewal as a box-ticking exercise and may not have given the necessary consideration to their MFR compliance. While there is no longer an obligation to report as often, MFR still must be calculated quarterly to ensure you fall within your parameters.
If you are selected for an audit, you will only have 21 days to provide the following information:
- your MFR and Financial Statements
- A copy of your QBCC review control sheet prepared by the independent accountant conducting the review
- Supporting documents such as bank statements, ATO account balances, aged debtors and creditors
If you do receive an audit and don't respond within the 21 day time frame you will be issued with a 'Show Cause Notice' and failure to respond to this may result in your license being suspended or cancelled.
Additionally, Licensees are required to submit their internal management accounts if required by the Commission. The Commissioner will notify the Licensee of the time frame to provide the information and failure to provide this in the required time frame may result in the Commission determining that the licensee has failed to meet the MFR.
If you were to receive a notice tomorrow, would you be able to provide all of this information?
As part of your obligations for self-assessment, you are required to review your financial information each quarter - AND keep a record of it. But we can also help! We recommend having one of our accountants review this for you each quarter to ensure that you have met your licensing requirements. Having a regular meeting with your accountant to discuss your financial position may also provide further insight into your business trends and opportunities - so it really could be a blessing in disguise!
So keeping on top of your record keeping requirements is the easiest way to ensure that you can mitigate your risk. If this rings any alarm bells for you, please contact our office and we will be able to assist you.