As the BAS returns are prepared quarterly and lodged during the financial year, it is not possible for this firm to review the correctness of the underlying financial information as part of the preparation of the quarterly BAS return. This is because we are engaged to prepare the annual accounts after the conclusion of the financial year.
Therefore, for the quarterly BAS returns, we will rely on and process the financial information provided to us without any review of the primary source documents. In doing that, we will make the following specific assumptions:
- The financial information provided to us is accurate.
- The financial information correctly states the GST position. For example, all input tax credits, and GST payable amounts have been correctly recorded in the general ledger. If you are unsure of the correct position or require advice regarding this, we are able to provide this as work which is outside the scope of this letter and charged as additional services.
- You have the necessary supporting documentation to satisfy the Australian Taxation Office for GST purposes. Again, if you are unsure of the ATO requirements or require advice regarding these documents, we are able to provide this as work which is outside the scope of this letter and charged as additional services.
- You hold valid tax invoices and adjustment notes for all expenditure incurred by you in respect of which an input tax credit is being claimed. Substantial penalties apply for an incorrectly prepared BAS. If you have any queries in respect to this, please contact our office for assistance.
However, it is possible that, when the financial accounts are prepared, some discrepancies will exist between the information disclosed in the quarterly BAS returns and in the annual financial statements.
Should any discrepancies arise, we will discuss the need to correct either the BAS returns and/or financial accounts. Those services will involve work which is outside the scope of this letter and will be charged as additional services.
Preparation of the Annual Financial Accounts, including the Profit and Loss Statement and the Balance Sheet. This firm has been engaged to prepare the annual financial accounts of the business entities in your group. This service includes the preparation of:
- a Profit and Loss Statement;
- a Balance Sheet; and
- Notes for the above accounts.
This service includes maintenance of the chart of accounts for the general ledgers of your business entities. It also includes telephone support should you require any assistance as to how to record specific transactions in the general ledger.
The fee for this service also includes the preparation and lodgement of the standard reports to be furnished to ASIC.
This service does not include the preparation of one-off accounts for presentation to your financiers for additional finance and the like.
This firm has been engaged to prepare and lodge income tax returns for the business entities in your group and for your family.
This firm will not be responsible for reviewing or verifying any financial records or statements provided to it either via manual cashbooks or prepared on accounting software such as Xero/MYOB or QuickBooks or any other bookkeeping program. Correct coding or classification of accounts is outside the scope of this engagement. If assistance is required in how to correctly code or to review how you currently do so, please discuss this with us. This will entail work which is outside the scope of this engagement and will be charged as additional services.
Also please ensure that you have all source documentation available to allow this firm to analyse the income tax implications of any transaction, if we request to see it. Whilst we will not as a matter of course be looking at these documents, the ATO will expect you (and you are required) to have them available before any claim is made in your income tax return. We may in some circumstances also request to see source documents if a tax issue is particularly contentious.
It is also expected that, in respect of individual income tax returns, each person will have the necessary documents so as to comply with the substantiation provisions of the Income Tax Assessment Act.
We will specifically advise as to the requirements of the substantiation provisions relating to your income tax return and of the necessity to obtain acceptable receipts as specifically required by the legislation. We will not, however, be checking that the requirements of the substantiation provisions have been satisfied.
This specifically means that we will not be reviewing your log book or any calculations or information you provide us, for example a rental property schedule either prepared by you on spreadsheet or by a property manager. If you require assistance in completing a log book or preparing any calculations or you would like us to review such work, please discuss this with us. This will entail work which is outside the scope of this letter and will be charged as additional services. From time to time, this firm prepares template licences and schedules to assist with the collation of information to complete income tax returns.
These will be provided free of charge.
The fee for this service does not cover any inquiries made to us or investigations involving us conducted by the Australian Taxation Office. Substantial penalties apply for an incorrectly prepared income tax return. If you have any queries in respect to this, please contact our office for assistance.
Each client in the Group agrees that we can bank into our trust account tax refund amounts if applicable received on behalf of that client and can deduct from those amounts any fees owed to us either by that client or by any other member of the Group.
This firm has also been engaged to prepare and lodge the FBT returns if required for your business entities. Please note, with the introduction of GST, it is no longer possible to prepare an FBT return from the information contained in the general ledger.
It is necessary to revert to the source documentation to allow our firm to analyse the FBT implications of any transaction.
Our fee for this service includes advice on how to collate the information necessary to prepare the annual FBT return. This fee also includes telephone advice on basic FBT issues. Our fee also includes an annual review of the methods available to reduce the FBT expense on the annual FBT return.
This fee also includes the calculation of Reportable Fringe Benefits Tax Amounts that may be required to be included on the annual payment summaries for your employees (including family members employed in your business).
This firm has also been engaged to prepare and lodge any Company’s Australian Securities and Investment (ASIC) Annual Statement and Solvency Statement and the preparation of Company Minutes etc. to comply with statutory requirements where applicable.
You are responsible for ensuring all payroll records are accurate and comply with the relevant State and Federal laws.
When requested we will advise or instruct staff on the maintenance of the accounting and internal control systems.
Consulting advice as requested from time to time. Note we provide an annual management letter that covers some key areas attached in Consulting Services Appendix 2.1 .
Due to recent changes to the licensing, this firm can refer superannuation compliance and financial planning. Please contact us for further information.
This work will be conducted in accordance with the relevant professional and ethical standards issued by the Accounting Professional & Ethical Standards Board Limited (APESB) and with relevant Australian Laws.
Chartered Accountant, Chartered Tax Adviser, Registered Tax Agent, Former AGPAL Surveyor 10 years of service
David Dahm is CEO and founder of the national medical and healthcare chartered accounting firm Health and Life and global Founder and CEO of the not for profit project the International Healthcare Standards and Ethics Board (www.ihseb.org)
After a serious work related car accident in 1989, and nine operations later I continue to be a patient and provider advocate. I enter my third decade as a national Chartered Accountant for Medical and Healthcare practices in Australia. I am a former 10-year Australian General Practice Accreditation surveyor. I come from a medico family. I have served on the AAPM national Board and was the inaugural national Chair of the Certified Practice Manager CPM post nominal. I continue to provide accounting tax and practice management advice to many practices all over Australia.
You know who you are and I thank you for this real honour and privilege to serve you and your community through you. Note, I am not a lawyer please seek appropriate legal and accounting advice. This information is for general information and discussion only.