.png)
Hi all,
I would appreciate your comments on the following situation.
I have a long standing client that is also an accountant. As Trustee of his SMSF he prepares his own MYOB file and forwards this to me for audit along with all supporting documents. In the past I have prepared the accounts for the fund based on the Profit and Loss and Balance Sheet taken from the MYOB file after I have completed the audit and made sure the MYOB file is correct.. I then forward all details to a tax agent to have the tax return completed. Once the tax return has been completed the Trustee updates the MYOB file for the tax situation.
This year I suggested that the client prepares his own financial statements. He has agreed to this and has forwarded a draft set of accounts for me to audit. We are just waiting on the tax return so he can make the final adjustments to MYOB and finalise the accounts.
The tax agent is not happy with this and believes that they should also prepare the accounts.
Your comments would be appreciated.
Hi Brian my name is Dipak Mehta. I am also a member of the Auditor's Institute same as you are. You are not preparing financial statements and tax return. You are just doing audit so your position is clear. There is no independence threat unless you and the other accoutant have reciprocal arrangements. I assume you are not getting any other business from the other accountant. If this is correct then there is no independence issue.
The tax agent's issue is not relevant to the independence issue. In my opinion it is not necessary that tax agent also prepares accounts.
Please note that whatever mentioned above is my view please also confirm with the experts of the Institute.