Chartered accountants in Australia are persons who have obtained a higher level of qualification in the accounting profession. Thus, not all accountants are qualified as chartered accountants and those who have not yet applied for this qualification can develop only certain types of accounting activities, mainly basic.
Chartered accountants have the right to develop a wide range of accounting activities, which will be described in this article and which refer to more in-depth accounting procedures.
They can provide their services to both local and foreign investors who want to set up a company in Australia, as well as to public institutions.
Local and foreign investors who will open a company in Australia will need the services of an accountant or of a team of accountants, depending on the type/size of company they will start here.
The accountants are the sole entities who are entitled to handle the company’s financial documents and to represent the company in the relation with the tax state institution.
Even a businessman who will set up a company in Australia as a sole trader may need the services of an accountant. If the business is a business form that has a legal personality, then it is mandatory to appoint an accountant who will be in charge with all the documents.
The accountant will also have to prepare the annual financial statements concerning the company’s profits and taxes due.
If you are interested in purchasing a shelf company in Australia, you should know that once the company becomes operational (and this can be done very fast after the change of ownership), you must also hire an accountant.
The accountant will take over the same attributions he or she would have if the company was incorporated following the standard registration procedure.
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What services can chartered accountants in Australia provide?
According to the Australian accounting standards, chartered accountants can provide basically any type of accounting service that is regulated under the local law.
We recommend to request the services of this category of accountants if you plan to open a company in Australia that operates as a large business from the beginning of its activity, as the accounting procedures in this situation will definitely be more complex.
| Quick Facts | |
|---|---|
| What is a chartered accountant | A chartered accountant is a person who has gained a high level of qualifications in the field of accounting and who can provide assistance in other related matters, such as business consultancy, management. The accountant has an in-depth experience in the field. |
| Types of services provided by chartered accountants | Forensic accounting, bookeeping, audit, financial planning, business advice, reporting, assistance in corporate restructuring, etc. |
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Accounting laws for sole traders in Hungary |
The Accounting Act and the Personal Income Tax |
| Types of annual accounts |
Simplified annual accounts and |
| Institutions that can use the services of chartered accountants | Both public institutions and private entities (commercial, non-profit). |
| Accounting services for public institutions |
Audit, valuation, financial advice, tax services, reporting, basic accounting procedures, insolvency, etc. |
| Institution that regulates the activity | Persons working in this industry must abide by the rules of the Chartered Accountants Australia and New Zealand.
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| Minimum qualification for becoming a chartered accountant | Have a bachelor degree in fields related to accounting, have sufficient work experience in accepted fields (tax, accounting, finance, etc.), obtain a provisional approval from the Chartered Accountants Australia and New Zealand. |
| Foreign accountants allowed to work in Australia (yes/no) | Yes |
| Minimum requirements imposed to foreign accountants | They must comply with the same regulations imposed to local chartered accountants. Besides these, they have to provide evidence on knowing the English language (IELTS 6.5 or IELTS 7 for those who have been accepted on a permanent migration assesment) and have a suitable visa. |
| Providing management services (yes/no) | Yes |
| Types of management services | Management services designed for the needs of a business (a start-up, a developing business or a well-established company), which aim at the development of the business, the strategy to apply on a given market, the most effective ways to budget the business, etc.). |
| Accounting services for companies | Bookkeeping, GST reporting, tax compliance, preparing tax reports, payroll services, and other services, depending on the needs of the company. |
| Submitting tax returns (yes/no) | Yes |
| Basic payroll services | Calculating the wages of the employees, the taxes associated with their employment contracts, submitting the taxes due, etc. |
| Difference between an accountant and a chartered accountant | A chartered accountant is a member of the Chartered Accountant Institute and he or she has top level knowledge in the field. The chartered accountant can offer his or her services to the top management structure of a company, by presenting the most suitable ways to invest/expand/strategize, etc. On the opposite side, an accountant who has not been registered as a chartered accountant is not entitled to provide such services. |
| Law regulating the activity of chartered accountants in Australia | The internal regulations of the Chartered Accountants Australia and New Zealand, the Civil Law (Wrongs) Chartered Accountants Australia and New Zealand Professional Standards Scheme 2019. |
Below, you can find out some of the services that chartered accountants in Australia can offer:
- audit services – the audit is required for certain types of companies, and it refers to the procedure through which the company’s yearly financial reports are reviewed by a specialist;
- bookkeeping – chartered accountants can also develop basic accounting services, such as bookkeeping, which refers to recording the company’s transactions (ledgers, the sales, the purchases, and so on);
- financial planning – this can be done by a highly specialized accountant in Australia as the person can offer investment strategies to a client (company or individual), based on the current financial situation;
- financial reporting – all companies are required to submit financial documents and chartered accountants can easily prepare the required documents;
- forensic accounting – this is a special branch of accounting, where the accountant participates in a legal investigation, with the purpose of determining whether the financial documents can present any illegal activity.
What is the law on chartered accounting in Australia?
Whether a person becomes a tax accountant in Melbourne or a tax accountant Sydney, the applicable legislation will be the same. The main rule of law which applies for chartered accounting is the Civil Law (Wrongs) Chartered Accountants Australia and New Zealand Professional Standards Scheme 2019 (No.1).
The law establishes 3 main categories of services providers and for each class, there are different thresholds regarding their liability, insurance and other legal aspects that can derive from this profession.
Category 1 refers to accountants in Melbourne or located elsewhere in the country who provide accounting services related to audit. Such persons can be part of a corporation that offers accounting services or registered as self-managed accountants.
Audit services included in this class can refer to:
- financial statements audits and reviews;
- financial services audit licenses;
- credit license audit;
- compliance plan audits.
It includes all entities which conduct audit procedures following the standards of the Auditing and Assurance Standards Board, as well as those reporting to the Australian Prudential Regulation Authority.
Category 2 refers to any tax accountant in Melbourne or located elsewhere who provides accounting services regulated under the Chapter 5, the Chapter 5A or the Section s.233(2) of the Corporations Act 2001.
It also includes the services regulated by the Bankruptcy Act 1996 (in all cases where corporate bankruptcies occur, the participation of an accountant is necessary).
Category 3 of accounting services refers to any of the services that have not been included in the Category 1 or 2.
What is the tax law in Australia?
All accountants in Australia must also be updated with the tax legislation applicable in this country. Although their main work is with financial documents, accounting and tax are closely intertwined and this is why it is compulsory to know tax legislation as well, specially in the field of chartered accounting.
First of all, the law of taxation distinguishes between 2 categories of taxpayers: 1) individuals and 2) companies.
Taxes are charged uniformly at a national level, so a tax accountant in Melbourne will need to compute the same taxes due as a tax accountant in Sydney would do, although few differences can appear in certain cases.
For instance, different Australian regions can charge the stamp duty at a different value or based on different mechanisms.
In this particular case, accountants in Melbourne may compute the tax due following a different system than it would apply to a tax accountant in Sydney.
Generally speaking, Australia charges taxes for the following sources of income:
- tax on income;
- tax on capital gains;
- consumption tax;
- fringe-benefits tax;
- Medicare levy;
- superannuation tax;
- trading taxes – the excise duty/customs duty.
All these taxes are very important when dealing with financial documents and all accountants in Melbourne, Sydney and other parts of the country have to be aware on any changes appearing regarding these taxes, so that they can be reflected correctly in any financial paper.
When preparing the financial reports that must be submitted by companies with the local tax institution, which, in this case, is the Australian Tax Office, accountants will verify matters such as:
- all the taxes due;
- any tax benefits the company can be entitled to;
- any tax deductions.
It is also important to know that the accounting and tax system applicable to a non-profit organization will be different that the one applicable to a commercial company.
Thus, for a non-profit organization located in Sydney, a tax accountant in Sydney will need to comply with different tax and reporting rules than the ones the accountant will prepare for a legal entity that develops commercial activities.
What public accounting services can accountants in Sydney provide?
As said above, a chartered accountant has the right to exercise his or her profession within public institutions, which also need to have their accounts maintained by a specialist.
Public accounting services are similar with the accounting services available for businesses.
Thus, an accountant in Australia can provide public accounting services for the following: 1) financial services, 2) financial advice, 3) forensic accounting, 4) valuation, 5) taxation, 6) insolvency, 7) company reorganization, 8) bookkeeping, 9) management, 10) auditing, 11) assurance, 12) basic accounting, 13) credit services.
What are the main services for consumer/commercial credit in Australia?
A person or a company is entitled to obtain a credit from the competent financial institutions in Australia. When this happens, the assistance of an accountant in Australia is always necessary, as the person has the necessary expertise in evaluating the ability to obtain a credit, by following specific procedures.
A consumer credit refers to the types of credit lines that can be obtained by individuals for purposes such as: 1) personal, 2) family related, 3) household related.
A commercial credit defines the credit accessed by any type of business venture, starting from the sole trader to a large corporation. The accountant will analyze the type of credit needed, its value, as well as the capacity of the entity to maintain the respective credit that is requested.
For individuals, the accountant will be able to assist in the following types of credit: 1) mortgages, 2) loans for buying residential properties, 3) personal loans, 4) leases, 5) credit cards, 6) overdrafts.
With regards to the consumer credit rules and procedures, the regulations of the National Consumer Credit Protection Act 2009 will be enforced. Our accountants in Sydney can assist individuals in accessing a line of credit addressed to natural persons.
How can individuals become chartered accountants in Australia?
The Australian accounting standards impose different rules for becoming a general accountant and a chartered accountant. Of course, becoming chartered accountants in Australia is much more difficult than simply becoming an accountant. In the list below, you can find out some highlights of this profession:
- all applicants must have appropriate qualification, which, in Australia starts from Level 7 (which refers to bachelor degree);
- for non-English natives, becoming an accountant in Australia is bound by proving English speaking abilities (IELTS 7.0 minimum);
- it is also possible to have 1 year of studies in English or 3 years of employment (paid or voluntary work) in an English-speaking country in the last 5 years;
- one can become chartered accountant if the person completes at least 3 years of mentorship;
- please mind that once registered with the program for becoming a chartered accountant, you will also have a time limit to complete the program, set out in the Section 5.11 of the Chartered Accountants of Australia and New Zealand.
Can chartered accountants in Australia offer tax services?
Yes, accountants in Sydney and those located in other parts of the country can provide tax assistance. This is a vital component of accountancy, and this service is always needed by those who want to set up a company in Australia.
Tax services refer to a wide range of matters, such as determining the overall tax level of an entity, analyzing the possible tax benefits that can be obtained for a category of taxpayers and applying for them following the current Australian accounting standards.
Can companies benefit from management services?
If you have a company in any Australian region or you plan to start the process of company formation in Australia, you can definitely receive management services.
For this, you can always rely on our team of specialists in company incorporation in Australia, but you can also request such services from chartered accounts.
If you will select the services of chartered accountants in Sydney, please make sure that they have the necessary expertise in this field, as not all chartered accountants will cover all these accounting branches, because each of them requires a certain level of qualification and expertise.
If you need the services of an accountant in Australia on matters related to management, you can expect to receive advice on your budgeting, management efficiency, strategy development, better ways to carry out internal company controls and numerous others.
What other services can companies in Australia obtain?
Besides the services presented up until now, chartered accountants in Australia can offer additional services to foreign and local businesses. If you are interested in company incorporation in Australia, please mind that your company can benefit from the following:
- assisting the company in meeting its financial goals;
- reporting on the financial performance of the company, so that the directors and shareholders can take up-to-date investment decisions;
- assisting in any matter related to employment payments (salaries, bonuses, etc.);
- reporting on the GST and computing the GST due;
- cloud accounting and bookkeeping.
How can an accountant in Australia help with tax returns?
All companies have to prepare tax returns, regardless of the legal entity under which the business operates. Differences in reporting will appear depending on the legal entity.
The chartered accountants in Australia will prepare the documentation as required by the Australian Taxation Office and based on the requirements imposed for your company type.
In most of the cases, the accountant can prepare the financial documents in approximately 10 days (in the case of small companies). For those who have already surpassed the submission deadline, the accountants can prepare the documents in an expedited manner, after addressing the Taxation Office.
What payroll services can accountants in Sydney provide?
The accountants will calculate the withholding taxes that have to be retained from the salaries of the employees. Our chartered accountants in Australia will work with modern accounting software which can provide an accurate situation regarding payroll.
Of course, accounting obligations regarding payroll also include paying the payroll taxes, a service that is intermediated by the accountants who work for the Australian company.
For more details, our team of consultants in company formation in Australia remains at your service.