Globallocal ROLE BE? Borders Are Not the Boundaries They Once Were for Small Businesses, and Many Australian Practices Are Reaping the Rewards of Going Global

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NO4 32 VOL 2016 / SEPTEMBER AUGUST Public

accountantTHE OFFICIAL JOURNAL OF THE INSTITUTE OF PUBLIC ACCOUNTANTS

inside INNOVATION: WHAT SHOULD Making GOVERNMENT'S GLOBALlocal ROLE BE? Borders are not the boundaries they once were for small businesses, and many Australian practices are reaping the rewards of going global

| FUTURE-PROOFING YOUR PRACTICE | DIGITAL MARKETING | NEW TECHNICAL MUST-KNOWS |

cover.indd 1 7/21/2016 12:50:48 PM August / September 2016 Contents

PUBLIC ACCOUNTANT August / September 2016 $9.95

Business Loans for Your Clients. Quick. Smart. NO4 32 VOL 2016 / SEPTEMBER AUGUST Public Public accountantTHE OFFICIAL JOURNAL OF THE INSTITUTE OF PUBLIC ACCOUNTANTS

inside INNOVATION: WHAT SHOULD Making GOVERNMENT'S accountantTHE OFFICIAL JOURNAL OF THE INSTITUTE OF PUBLIC ACCOUNTANTS ROLE BE? GLOBALlocal Borders are not the boundaries they once were for small businesses, and many Australian practices are reaping the rewards of going global

| FUTURE-PROOFING YOUR PRACTICE | DIGITAL MARKETING | NEW TECHNICAL MUST-KNOWS |

I spoke to our accountant and she introduced cover.indd 1 7/21/2016 12:50:48 PM me to Moula… they assisted me and within

24 hours we had a cash injection. It’s good As regulatory barriers to know that when we get a good business to overseas trade fall, particularly trade with Asia, opportunity, we can get support. SMEs are eyeing new and cost-effective ways to boost Stephen - Scotty’s Wholesale Meats their service offerings. In this issue, we look at the opportunities and the risks for accountants of importing and exporting. We also take a look at what 26 the government’s innovation Making drive means at the grassroots level, and explore the progress global made to date. In addition, we profile IPA local member Luke Dawson, who Borders are no is riding the wave of modern longer boundaries technology to future-proof for small his firm and expertise. Hundreds of leading accountants and bookkeepers businesses, and many Australian practices are are already partnering with Moula. reaping the rewards of going global

by Michelle La Partner with us Features = Business clients can apply online in 10 minutes and Turning passion into livelihood Improving your get approved in under 24 hours 20 Director of wHeregroup Todd Hunter found 42 online presence = a way to turn his passion for property into a Social media is changing the Transparent pricing: no hidden fees, no establishment successful, sustainable business – but his road game and accountants must Read Public Accountant fees and no penalty for early repayment to success was less than conventional embrace the digital space to magazine online and Moula is Xero’s Preferred by Michelle La engage existing clients and win add your ideas: new business pubacct.org.au = Join our partner program to refer clients for a loan Financial Services Partner Igniting the ‘ideas boom’ by Michael Masterman for Small Business Lending. Public Accountant magazine you can trust is now available to read online 34 Innovation is central to a prosperous, modern on the Public Accountant digital economy. But what role – if any – should hub, which contains articles government play in fostering a more agile and from the print magazine and much more. entrepreneurial business environment? by Aleks Vickovich Visit pubacct.org.au WANT TO KNOW MORE ABOUT MOULA’S PARTNER PROGRAM? and join the conversation.

 Phone: 1300 88 52 36  Email: [email protected]  Web: www.moula.com.au/partner pubacct.org.au August / September 2016 1

Advert Template.indd 1 7/19/2016 4:38:49 PM P001_Contents.indd 1 7/22/2016 5:02:57 PM Contents 2017 VIC & TAS CONGRESS Thursday 2 - Saturday 4 March RACV Resort, Goldﬁ elds Public Accountant is published bi-monthly by Momentum Media for the Institute of Public Accountants.

Vol. 32 No. 4 ISSN 1839-4264 48 Editorial board IPA Wayne Debernardi Securing Vicki Stylianou your future Publisher Alex Whitlock The bulk of Australian accounting ﬁ rms don’t have Managing editor an adequate, or even any Katarina Taurian succession plan for their Journalists business. This has a direct Miranda Brownlee impact on the value of a Michelle La practice and the livelihood of Mitchell Turner its owner, so what’s the best Aleks Vickovich approach for SMEs? Adam Zuchetti

by Adam Zuchetti Production editors Francis Wilkins Gabriella Cordeiro

Designers Dan Berrell “The consequences... of failing to plan for business Allisha Middleton-Sim succession events can be signiﬁ cant and, in some instances, Jack Townsend Production manager can cripple business activity and signiﬁ cantly reduce the Lucy Allman

wealth that has been accumulated by the business owner Editorial enquiries Katarina Taurian through years of hard work” (02) 9922 3300 [email protected]

Advertising enquiries Ready to launch Public Accountant | Technical Jordan Coleman (02) 9922 3300 For Luke Dawson, digital disruption [email protected] 54 and a shake-up of the compliance 66 68 70 Trusts and the new small Structuring non-commutable Fintech and cyber security 65 business tax rollover reversionary pensions Businesses can’t afford to neglect In the last issue, we outlined the Implementing non-commutable online security, and the cyber security important new small business pensions requires careful thinking Subscriptions industry is mushrooming tax rollover that commenced on to avoid serious consequences and world present accountants with some 1 July 2016. Now, it’s time to focus on ensure all the legal and practical Get up to speed how it may be applied to trusts issues have been considered (03) 8665 3115 of the biggest opportunities yet – if with all the

they’re willing to embrace change 72 latest in tax,

Clear and present danger An alarmingly small proportion of SMEs use external professionals Technical in making key decisions and superannuation, by Michelle La Our technical section accountants must become more relevant to their SME clients keeps you abreast of the MOMENTUM latest news and updates insolvency MEDIA affecting the industry and more 74 Momentum Media Understanding management buy-outs Succession planning is one of Level 13, 132 Arthur Street, the biggest bugbears for small businesses, and accountants need to be able to help out North Sydney, NSW, 2060 Visit the Goldﬁ elds and leave a little wealthier! pubacct.org.au August / September 2016 65 ©Momentum Media, 2016. All rights

P065_Technical_Cover)_FW.indd 65 7/21/2016 11:53:55 AM reserved. Unearth the riches of the Victorian Goldﬁ elds at the 2017 VIC & TAS Congress. Regulars Opinion Publication Conditions The opinions expressed in Public This event is sure to be the highlight of the 2017 Victoria and Tasmania CPE calendars. 4 President’s report 58 360 Degrees Accountant are those of the authors, not the Institute, unless 6 From the CEO 60 Opinion: Vicki Stylianou otherwise stated. The IPA accepts no responsibility for the accuracy 8 Upfront A recent trip to the US reaf rmed a long-held of information in articles and Space is limited, secure your attendance with a $150 deposit, IPA view: for the Australian economy to grow advertisements in Public Accountant. The IPA delegation’s visit Article submissions to Public and prosper, it is vital that more SMEs and Accountant by IPA members and others visit publicaccountants.org.au/victascongress2017 to China in June was a are welcome. Articles are accepted for resounding success small businesses become exporters publication only on the condition that 62 the authors give the IPA an irrevocable 76 Register of members Opinion: Tony Greco non-exclusive licence to publish the Is the current level of oversight of the article and authorise the Institute 79 Business directory to give permission for reproduction ATO appropriate or excessive? This is the of the article in whole or in part by other persons and organisations for issue the Treasurer has asked the House of educational and training purposes, as Representatives Tax Committee to investigate well as on the IPA websites.

2 August / September 2016 pubacct.org.au

P001_Contents.indd 2 7/25/2016 4:02:42 PM Advert Template.indd 1 7/19/2016 4:36:47 PM President’s report

Taking SME research to the next level

fter three successful years such as the International Federation of Accountants, the Talk to us about Australian Accounting Standards Board and the Financial in operation, the IPA- Reporting Council. It will address issues and develop policy Deakin SME Research papers to inform these bodies along with the Confederation Partnership has been of Asian and Pacifi c Accountants, the Accounting insurance Aextended for a further fi ve years to Professional & Ethical Standards Board and the ACCC. The centre will provide technical support to the IPA on create a dedicated research centre. how to improve Australia’s taxation and superannuation IPA Insure provides competitive, quality insurance products for IPA members and their clients: system from a macro perspective and in relation to small The IPA-Deakin SME Research Centre will be located in business taxation. • Professional Indemnity Insurance the Faculty of Business and Law at Deakin University. The Importantly, the centre will update the Australian Small • Tax Audit Insurance centre’s role is to issue briefi ngs, policy papers and research Business White Paper, a critical output of the centre that with an SME focus. Areas covered include taxation issues, will provide the central policy platform for the IPA. It will • General Insurance superannuation, competition policy, governance and include an extended chapter on innovation and will form corporations law, innovation, trade policy, fi nancial services part of the IPA’s response to enquiries stemming from the • Personal Accident & Sickness Insurance and small business regulation. development and implementation of the government’s A major achievement in 2015 was the issue of the Small National Innovation and Science Agenda. Save time and money, get expert insurance advice from the dedicated team at IPA Insure. Business White Paper, which was released in Parliament The centre will also partner with Deakin’s Centre for We’re here to help. House in the presence of two government ministers and Cyber Security Research on SME-relevant developments, which included several well-researched recommendations. and will work closely with the IPA to respond to These related to revamping education and trading, a government consultation on fi nancial services and, at a state-backed loan guarantee scheme, venture capital, deeper level, to government discussion papers. innovation policy, government regulation, fair work laws This development will no doubt extend IPA’s insights and competition policy. With greater resourcing and into many facets of the SME sector and bolster the commitment under the new agreement, the IPA-Deakin organisation’s advocacy and lobbying eff orts. SME Research Centre will continue to be a pioneer in thought leadership in the accounting profession. Get a quote While strengthening the IPA’s ongoing thought leadership Call us on 03 8665 3139 or email [email protected] and advocacy supporting small businesses across Australia, publicaccountants.org.au/IPA-Insure the centre will also deliver strategic advice to peak bodies Wendy Leegel FIPA FFA

IPA Quattro Pty Ltd, t/as IPA Insure ABN 34 601 666 746 (CAR 467064). Corporate Authorised Representative of Westcourt General Insurance Brokers Pty Ltd (AFSL 238447 | ABN 81 009 401 772).

4 August / September 2016 pubacct.org.au

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Opportunities to be realised Professional Assist in China The IPA’s Online Technical Helpdesk Professional Assist connects you with leading specialists he range of Australian business companies wishing to establish themselves in China and advice to work through these issues to generate success. who provide expert advice on regulatory and complex opportunities in China was We were fortunate to meet with the best and brightest of business issues that may affect you and your clients. the focus of the IPA’s fi rst the business sector in China, such as: delegation to China in June. Professor Li of the National Accounting Institute – a Why use Professional Assist? TThe delegation consisted of a group of renowned expert in China’s taxation system; Professor Zhang – chief economist of Ruihua Certifi ed • Complimentary for IPA Members more than 30 senior IPA members from Public Accountants (an IPA member), one of the largest all over Australia who set off to Beijing accounting fi rms in China with more than 10,000 staff ; • Access advice on superannuation, taxation, corporations Mr Fang – CFO of Gome Holdings (an IPA member), law, workplace law and more for a high-level delegation examining one of the largest technology and retail innovation the continuing emergence of this companies in the world with annual revenues in excess • Quick responses to your complex technical queries economic super power. of AU$40 billion; The managing partner of Shining Commercial Tax Agent • All advice is provided in writing and covered by Firm (an IPA Member); I, along with IPA deputy president Damien Moore FIPA Professional Indemnity Insurance and chief fi nancial offi cer Brett Maloney FIPA, led the The CFO of Cummins (an IPA Member); Nick Coyle, general manager of the Australian Chamber delegation, holding a series of meetings that provided an • Receive monthly newsletters containing regular excellent insight into doing business in China and the of Commerce in China; and cultural aspects that you need to be sensitive to. The CFO of China Housing Corporation (an IPA Member) industry updates The comprehensive technical program let us enrich We were also fortunate to meet with senior our knowledge of China’s signifi cance for the Australian • Access to an extensive research library, housing thousands representatives from the Australian Embassy in Beijing, economy and gain detailed insight into the Chinese taxation of articles and previously asked questions AusTrade and the Victorian Government Trade Mission. system, the impact of the China-Australia Free Trade This was the fi rst delegation to China and, based on its Agreement (ChAFTA), investment trends and opportunities. For more information and to register, visit success, it will not be the last. We will look to pull a further The trip also expanded our network of colleagues, with program together for a 2017 delegation. I would encourage publicaccountants.org.au/professional-assist a vast network of IPA members in China and a focus on members to seize the opportunity when it arises next year. innovation and technology, reforms to the retail sector, logistics, engineering and construction developments, and the operation of the accounting profession in China. The delegation provided extremely senior interactions designed to explain the practical issues faced by Australian Andrew Conway FIPA FFA

6 August / September 2016 pubacct.org.au

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With a reputation among Australians for being the national sporting and cultural capital of IPA events Australia, Melbourne has so much on offer. Leafy boulevards, trendy The IPA runs small and large events nationally throughout the year. cafés, chic bars, lavish theatres and a Below are some of the events for August and September.* labyrinth of fantastic laneways (not to mention great coffee!). Add to all of this a comprehensive education program, top-class 2016 NSW Join us for this jam-packed presenters and a social program that two-day event where you can will include a cocktail reception, & ACT claim up to 16.5 CPE hours, gala dinner and a secret farewell Conference as well as expand your dinner at one of Melbourne’s knowledge and sharpen your iconic destinations – you will not — competitive edge. be disappointed. Building the 21st Century Accountant For more information, visit For more information, visit This year’s conference will publicaccountants.org.au/ publicaccountants.org.au/ provide you with a supreme nationalcongress2016 professional learning nswactconference2016 2017 Vic & experience. Get inspired with Dates: Dates: thought-provoking keynote Wednesday 23 November 2016 Tas Congress Thursday 1 December 2016 2016 National Congress addresses from industry Thursday 24 November 2016 — leaders, stay up to date on the Friday 2 December 2016 — Friday 25 November 2016 This event is sure to be the highlight latest trends and developments The 2016 National Congress is the of the 2017 Victoria and Tasmania in the accounting profession, Venue: premier accounting event of the year, Venue: CPE calendars. discover the strategies that Pullman Sydney Hyde Park bringing you the best in professional Grand Hyatt Melbourne The 2017 Vic & Tas Congress business leaders have used to development and providing you with brings you the best in professional remain relevant and succeed in CPE Hours: information on the latest changes facing CPE Hours: development, providing first-class this ever-changing industry. Up to 16.5 hours the profession. Up to 21 hours technical updates and industry news, inspiring keynote speakers and an SOUTH AUSTRALIA - Contact: [email protected] VICTORIA - Contact: [email protected] QUEENSLAND - Contact: [email protected] invaluable opportunity to learn Date Time Topic Venue CPE Hours Date Time Topic Venue CPE Hours Date Time Topic Venue CPE Hours alongside your peers.

2/8/2016 4.30pm - 6.30pm SMSF Contributions Level 2, 422 King William Street, Adelaide 2 1/8/2016 9.00am - 5.00pm Trusts, Buying and Selling a Busi- IPA Training Centre, Level 6, 8 1/8/2016 9.00am - 4.30 pm SME Auditing for Beginners IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 Register before Thursday 1 December ness, Interest, Estate Planning 555 Lonsdale St, Melbourne 2016 with a $150 deposit to be eligible 10/8/2016 4.30pm - 6.30pm Multiple Holdings Level 2, 422 King William Street, Adelaide 1.5 8/8/2016 9.00am - 12.30pm Fundamental Principles and IPA Training Centre, Level 11, 300 Queen Street, Brisbane 3.5 and Land Tax 16/8/2016 9.00am - 4.15pm How to get the most out of your IPA Training Centre, Level 6, 7.25 Practice of SMSF Audit for Early Bird Pricing! tax losses 555 Lonsdale St, Melbourne 16/8/2016 4.30pm - 6.30pm Estate Administration Level 2, 422 King William Street, Adelaide 2 8/8/2016 1.00pm - 4.30pm Advanced SMSF Audit IPA Training Centre, Level 11, 300 Queen Street, Brisbane 3.5 and Planning 26/8/2016 9.00am - 4.30pm Taxation Aspects of Choosing a IPA Training Centre, Level 6, 7.5 Workshop For more information, visit Business Structure and Taxation 555 Lonsdale St, Melbourne 24/8/2016 8.00am - 10.00am Superannuation Law Level 2, 422 King William Street, Adelaide 2 9/8/2016 9.00am - 4.00pm Capital Gains Tax Issues IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 publicaccountants.org.au/ for SMSF 30/8/2016 9.00am - 5.00pm Effective Variance Analysis and IPA Training Centre, Level 6, 8 (Advanced) victascongress2017 Forecasting AND Streamlining 555 Lonsdale St, Melbourne 30/8/2016 4.30pm - 6.30pm Working With Start-Ups Level 2, 422 King William Street, Adelaide 2 11/8/2016 9.00am - 4.00pm Preparing Tax Returns for IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 31/8/2016 9.00am - 4.30pm SME Audit For Beginners IPA Training Centre, Level 6, 7.5 Companies 31/8/2016 4.30pm - 6.30pm Conflict: Why Early Level 2, 422 King William Street, Adelaide 2 555 Lonsdale St, Melbourne Dates: Intervention is Crucial 12/8/2016 9.00am - 4.00pm Preparing Tax Returns for IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 6/9/2016 9.00am - 4.30pm BAS Advanced Workshop IPA Training Centre, Level 6, 7.5 Individuals Thursday 2 March 2017 2/9/2016 9.00am - 12.30pm Managing Change in Level 2, 422 King William Street, Adelaide 3.5 555 Lonsdale St, Melbourne Friday 3 March 2017 Times of Continual Change 25/8/2016 9.00am - 4.00pm Taxation Aspects of Property IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 21/9/2016 9.00am - 4.00pm GST Aspects of Imports and Exports IPA Training Centre, Level 6, 7 Investment Master Class Saturday 4 March 2017 8/9/2016 8.00am - 10.00am Quarterly Tax Update Level 2, 422 King William Street, Adelaide 2 / GST and Real Property Investments 555 Lonsdale St, Melbourne 26/8/2016 9.00am - 12.00pm Effective Variance Analysis and IPA Training Centre, Level 11, 300 Queen Street, Brisbane 3 8/9/2016 1.00pm - 4.00pm GST Update and Level 2, 422 King William Street, Adelaide 3 27/9/2016 9.00am - 4.00pm Trust Taxation Intensive IPA Training Centre, Level 6, 7 Forecasting Venue: Current Issues 555 Lonsdale St, Melbourne 26/8/2016 1.00pm - 4.00pm Streamling the Annual Budget- IPA Training Centre, Level 11, 300 Queen Street, Brisbane 3 RACV Resort, Goldfields 9/9/2016 9.00am - 4.00pm BAS Advanced Workshop Level 2, 422 King William Street, Adelaide 7 1/9/2016 9.00am - 5.00pm SMSF Audit Fundamentals Principles IPA Training Centre, Level 6, 8 ing and Forecasting Process 13/9/2016 9.00am - 5.00pm Advanced SMSF Level 2, 422 King William Street, Adelaide 8 and Practice of SMSF/2. SMSF 555 Lonsdale St, Melbourne 29/8/2016 9.00am - 4.00pm BAS Fundamentals IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 CPE Hours: Strategy Workshop Advanced Audit 9/9/2016 9.00am - 1.00pm Excel 2010 - Pivot Tables IPA Training Centre, Level 11, 300 Queen Street, Brisbane 4 Up to 17 hours 21/9/2016 9.00am - 4.30pm Not-for-Profit Masterclass Level 2, 422 King William Street, Adelaide 7.5 23/9/2016 9.00am - 5.00pm SMSF Audit - Property Investment / IPA Training Centre, Level 6, 8 4. SMSF Audit - What happens when 555 Lonsdale St, Melbourne 16/9/2016 9.00am - 4.00pm Trust Taxation Intensive IPA Training Centre, Level 11, 300 Queen Street, Brisbane 7 22/9/2016 4.30pm - 6.30pm Succession Planning: Buy- Level 2, 422 King William Street, Adelaide 1.5 the trustees get it wrong *Events, dates and locations listed are correct at ing and Selling a Business time of printing.

8 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 9

P008_Upfront Events_FW.indd 8 7/22/2016 9:32:33 AM P008_Upfront Events_FW.indd 9 7/21/2016 6:12:10 PM Upfront “Inspiring, refreshed, re-energised and ready to implement necessary changes in my business” China delegation Congress Attendee — In June this year, the IPA gave members the opportunity to join a business delegation to Beijing for ve days. Led by IPA CEO Andrew Conway, the delegation was a rst for the IPA, and showcased for members the commercial opportunities that Australian businesses will see from the grassroots up, following the historic China/Australia Free Trade Agreement (ChAFTA) that came into force in December last year. Off the back of a successful rst trip, the IPA plans to offer this opportunity to members again in 2017. national

Left top: IPA member Mr Wei Fang (seated, far left), CFO of Gome Holdings (one of the world’s largest technology and retail innovation companies, with annual revenues in excess of AU$40bn) congress presents to delegates - Left middle: The IPA delegation 23 25 November 2016 to China brought together key leaders GRAND HYATT MELBOURNE Left bottom: IPA CEO Andrew Conway with Mr Yu Gu, General Manager of Huajian Green House The 2016 IPA National Congress is the premier accounting event of the year. Right top: Delegates at the Temple of Heaven We invite you to experience the lively and bustling Melbourne CBD, whilst

Right middle: earning up to 21 CPE hours. IPA International Education Manager Don’t miss out on the mid-year sale, ending 31 August. Secure your place (China) Rhona Chen with delegate, today, visit publicaccountants.org.au/nationalcongress. Joe Choueifaty

Right middle: Delegates visiting the Summer Palace

Right bottom: Sotos Zervides enjoying one of the presentations

Middle bottom: Bob Gajic attending the farewell dinner at Baijia Dayuan

10 August / September 2016 pubacct.org.au

P008_Upfront Events_FW.indd 10 7/22/2016 9:31:58 AM Advert Template.indd 1 7/19/2016 4:38:01 PM Upfront “Given that SBRR applies to small business entities who are in the main serviced by one or two person practices, it is important that the new laws can be interpreted without too much uncertainty”

THURSDAY 1 - FRIDAY 2 DECEMBER

Changing the Criteria of provide early guidance on how the IPA submissions ‘Ineligible Activities’ in the ATO will apply the recently enacted Income Tax Assessment small business restructure uiling te st centur ccountant and views Act 1997 roll-over (SBRR) laws. The new The IPA provided a submission SBRR rules introduce some new to Treasury on its consultation, concepts, so being able to obtain Join us for this jam-packed two day event where you can claim up to 16.5 CPE hours. The IPA’s latest submissions “Ensuring that venture capital some early guidance material include input on the income tax concessions are available concerning the application of To take advantage of our Get in Quick Price, register before 24 August by visiting tax rules and small business for investment in startup these SBRR laws is welcome. Tax publicaccountants.org.au/nsactconference FinTech, banking and insurance practitioners much appreciate restructure roll-over laws activities”. Our submission being able to obtain this guidance provides some recommendations ahead of its introduction on 1 July on modifications that should 2016. Given that SBRR applies be made to the Income Tax to small business entities that Assessment Act 1997’s definition are in the main serviced by one of “ineligible activities”. or two person practices, it is important that the new laws can Law Companion Guidelines be interpreted without too much 2016/D2 and 2016/D3 – uncertainty. The IPA made a Joint Submission number of recommendations in These law companion guidelines relation to the guidelines.

12 August / September 2016 pubacct.org.au

P012_Submissions and Views_FW.indd 12 15-Jul-16 4:40:20 PM Advert Template.indd 1 7/19/2016 4:37:30 PM Upfront Upfront ATO undertaking ‘aggressive’ Corporate tax minimisation costs US$1 trillion, claims insider surveillance — campaign The big four accounting firms have been Mr Rozvany spent 32 years working branded as aggressive and unethical and in corporate tax, and is Australia’s most — accused of “perpetrating the greatest tax published author on transfer pricing, a crimes in history” by a leading corporate The ATO has increased its surveillance, technique that multinational companies tax authority. and activity more broadly – including are using increasingly to shift profits from At least US$1 trillion in tax revenue in the SMSF sector – and is getting high-tax to low-tax jurisdictions. is lost worldwide, including $50 billion particularly “aggressive” with offshore Sham transfer pricing arrangements, he in Australia, as a result of aggressive tax investments, law firm Arnold Bloch says, are now out of control. minimisation schemes established by the Leibler has warned. “Transfer pricing behaviour clearly is four giant firms that audit the books of Clint Harding, an Arnold Bloch the greatest concern because it’s very easy nearly all the world’s major companies, Leibler partner, noted the ATO’s for a transfer pricing expert to dress up said George Rozvany, a 32-year veteran of surveillance capabilities have vastly a sham transaction as a real commercial the corporate tax industry. increased in the past three years, as transaction,” he said. “I’m a conservative man; I think the government continues to direct the figure is actually much higher,” “I’m talking about service Accountants funding and resources towards specific Mr Rozvany told the ABC. arrangements, intellectual property Licensing will progress when compliance targets. “It’s very clear to me that the big four transfers – such as patents or use of Money coming into Australia shy away from accounting firms are the masterminds of patents – and perceived transfer of goods, from overseas – including funds that ‘noise’ settles: Hayes international tax avoidance. sham loans between related parties, but can make their way into an SMSF SMSF licensing “They work with government to deliver in reality it’s all about providing services — – is high on the ATO’s watchlist, what they want for their clients. It’s not at too high a price which then shifts — Hayes Knight director Greg Hayes believes met all of your new disclosure obligations? Mr Harding said. set in a social context; it’s designed to [income] to a lower-tax jurisdiction.” A new report suggests thousands of the slower-than-anticipated take-up of You might need to review your marketing “When money crosses the border it deliver an outcome for their clients.” - ABC Online, 12 July 2016 accountants will not be authorised to provide licences under the new regime is partly material online and see if there’s any sets off a little flag with Austrac, and the SMSF advice after the June 30 expiration of intentional, with accountants waiting for statement you are making that would now, ATO is now getting pretty aggressive the accountants’ exemption. the barrage of commentary and marketing technically, be regulated advice, and make in terms of sending letters to people According to Investment Trends’ 2016 to settle before setting their arrangements demanding that they explain the nature sure you have the appropriate disclosures Big pay rises for accountants, SMSF Accountants Report, only 1,000 in stone. of the money,” he said. on them.” accountants have successfully got their “There’s so much feedback, so much “If that’s not clear, the ATO will Some details, right down to the licensing arrangements in place, through either commentary, so much marketing. Many certainly ask the question and put the lawyers and IT professionals letterhead used, are critical from a a full or limited AFSL, in the past 12 months. accountants have felt they need to onus on people to demonstrate where compliance perspective, he added. — Investment Trends said this means there are get past June 30 and then get a better it’s come from and what it is,” he added. “If you are an accounting firm, you’ll Accountants, as well as lawyers and for senior accountants and financial 5,500 accountants who are now appropriately understanding of the differences on offer Residency status is also high on hold a PI policy in your own right information technology professionals, licensed to provide SMSF advice. the ATO agenda, Mr Harding said, controllers. However, the executive market and what the best path for them is,” received the most generous salary Recent reports from ASIC have shown as the accountant. If you’re licensed, especially in cases where a taxpayer is has seen only selective appointments due Mr Hayes said. increases in the current remuneration that the take-up of the limited licence option, you’ll also be covered by the PI policy trying to convince the ATO they have to a lack of movement from incumbents,” “I imagine this will happen by the end review cycle, during which 16 per cent which involves an accountant obtaining their of your dealer group, for example. In ceased being an Australian resident. the Hays Salary Guide reports. of the year, if not early 2017,” he said. of employers offered no pay rises at all, own AFSL, is slow. terms of client engagement, if your The tax office is closely monitoring The use of temporary or contract Mr Hayes noted that as the regime according to Hays’ Salary Guide. Only 149 applications were approved as of activities are covered under the dealer the affairs of these taxpayers, actively staff will also increase, the guide notes, has taken effect, some of the finer and However, only 6 per cent received an May 23 this year. group’s authorisation, make sure it’s pursuing and questioning them where while for graduates, hands-on experience potentially problematic details have begun increase over 6 per cent, while one in five “There are still 12,500 accountants who clearly coming from the right arm of the there is an element of doubt, he said. continues to trump an impressive to surface – and accountants should saw an increase of 3 to 6 per cent. want to operate under a full or limited business,” Mr Hayes said. The ATO told SMSF Adviser earlier academic record. take note. A majority (58 per cent) received an AFS licence but who haven’t completed “You don’t want to be sending the client this year that there will be several items Staff retention will continue to be “You might have someone in your increase of less than 3 per cent, although the qualification process,” Investment on the 2016-17 regulatory radar that firm licensed or authorised, then a whole a statement of advice, or any advice piece, this figure is still above the official an issue for PricewaterhouseCoopers, Trends senior analyst King Loong Choi specifically concern SMSFs, including bunch not licensed or authorised,” he said. on your accounting letterhead. If you start inflation rate. Deloitte, Ernst & Young and KPMG, said at the time. related-party transactions, out-of- “You’ve got to consider how the firm crossing over into financial advice areas Competition for good candidates is with big four first movers still in high The research also found that there are 9,000 pattern growth in the value of an SMSF, will then manage things like basic client under your accounting label and that intense, but salaries remain stable due to demand from commercial organisations, accountants who have decided not to become and the tax treatment of funds in enquiries. Do all staff know where the accounting label is not the licensed entity, budgetary constraints. despite the trend towards the offshoring licensed, and will instead rely on referral pension phase. dividing line is and what the rules are? you’re opening it up to risk.” “Demand for senior candidates has of finance functions. relationships for their SMSF clients. - SMSF Adviser, 14 June 2016 “Also, consider your website: have you - Accountants Daily, 15 July 2016 continued to improve, most noticeably - AFR, 12 June 2016 - ifa, 2 June 2016

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P014_Upfront_News_FW.indd 14 7/22/2016 9:36:13 AM P014_Upfront_News_FW.indd 15 7/22/2016 9:36:33 AM Upfront Upfront

From the Hub IPA in the media Public Accountant’s digital hub is a daily source of the latest news relevant The IPA continues to to IPA members. Stay up to date at www.pubacct.org.au attract attention on a range BDO calls for 20-year of issues, including the stability period for super federal budget, tax reform Tax and advisory fi rm BDO Australia has called on both major and technology political parties to commit to a sustained period of stability for the superannuation tax system. BDO superannuation partner Paul Rafton says the current instability faced by the super Low-income super New platforms Tax time system, stemming from Small business proposed government changes, tax offset “We’ve created a measures “Clients not making contact is discouraging superannuants The IPA has platform, Professional with their accountants will aged between 25 and 40 from expressed strong Assist, which allows you “Unincorporated small not know what changes making contributions to super. “We conducted a brief survey support for this move, to log an inquiry with a businesses won’t they need to adjust to and completely miss out. The around our o ce focusing and has long been an panel of tax law experts may miss things they need mainly on 25- to 40-year-olds benefi ts will be extended advocate of and have that response to factor into their returns and found that no one was increasing measures provided back to you by increasing the and this cannot be corrected considering contributing beyond to support low- typically within four if eligibility turnover once the clock ticks over,” the mandatory super guarantee,” superannuation will look like for a signifi cant problems for be too consumed by processing income earners in the not 48 hours, and that threshold from said Tony Greco. Mr Rafton said. $2 million to $5 million “It’s not that people don’t want signifi cant period of time. some accountants. licence applications to closely superannuation can then be provided – SmartCompany per annum, and to plan for the future, but they “If a person in their 20s only “The slowness [is] turning monitor compliance with environment. directly to clients.” need certainty if they are to stay contributes the mandatory people o doing business in some licensing over the next 12 months, increasing the discount — – SMSF Adviser [Andrew Conway] invested in the process.” 9.5 per cent from now until their cases,” said Ms Gerber. Ms Gerber warned accountants to 8 per cent (and 16 per retirement, they’ll fall a signifi cant “A lot of the accountants lodging against becoming complacent. – Financial Observer While an ideal set of — cent over the next Perks for small business superannuation rules will mean portion short of what they applications at the tail end of “ASIC can still identify — decade). Disappointingly, di erent things to di erent will need to live a comfortable the transitional period probably incidents occurring now where Investing in IPA senior tax adviser Tony Greco Two-tier the $1,000 cap per said people running a business people, he said, for most lifestyle in retirement,” Mr Rafton thought they’d slip through quickly accountants have provided technology annum remains.” could still take advantage of Australians a sense of stability said, adding that they will then and that’s not what’s happened.” unlicensed advice and fl ag them tax system and certainty will go a long need to lean more heavily At last count, ASIC said that further down the track,” she said. “Our digital platforms the $20,000 instant asset write- [Andrew Conway] way to creating confi dence on the age pension or other of the 1,146 licence applications Regarding fi nancial advice, have been signi cantly “But the particular change off in which they could buy – Money Management in their funds and their ability investment alternatives. it has received since the start of Ms Gerber said ASIC will continue overhauled as an we are in least favour equipment for their business. to contribute. the transitional period, only 317 to closely monitor compliance organisation and we’ve of is that reduction of — “Unincorporated small businesses, “If both government parties Accountants facing have been granted a licence or around best interests, particularly spent a considerable the concessional caps,” including sole traders, partnerships were to commit to a sustained year-long delays with ASIC o ered a draft licence. A further given the NSG Services legal case. amount of resources [Tony] Greco said. “It’s Advice as tool to and businesses operating through period of stability, say for at It may take up to a year for 582 applications are yet to be ASIC announced in June it had in making sure our interesting that it applies broaden offering trusts, can also look forward least 20 years, it would allow ASIC to complete processing assessed, while another 264 commenced proceedings against organisation is equipped only if the legislation to a tax rebate this year,” he The IPA is adopting advice Australians to prepare for their of the remaining limited licence applications have been withdrawn the Melbourne-based fi rm, to do business in the 21st ever surfaces, so it’s an said. Mr Greco said the rebate as a key area of focus for future and know year-on-year applications, leaving many SMSF or returned because they were alleging the licensee had breached century, with a growing interesting dilemma that was the IPA’s signature policy its members in terms of what they are able to contribute accountants in the lurch, says one “incomplete, defi cient or missed the best interests duty. brand of Millennial people will nd themselves in its submission to the federal educational pathways, as and what the results will be,” SMSF compliance expert. mandatory information”. Depending on the outcome professionals coming in – that if the government government. The government it looks to broaden the Mr Rafton said. Sophie Grace Compliance and Ms Gerber said the increased of the case, Ms Gerber said it into the practice,” doesn’t get elected, then announced it in the 2015 budget traditional suite of services “Ideally, any changes that are funding ASIC is set to receive may, [Andrew Conway] said. it leaves us in a bit of and it comes into effect for the Legal’s director, Sophie Gerber, could potentially have signifi cant a quandary.” accountants offer. rst time this year. made will be followed by the said the slow pace at which however, fl ow through to many implications for the SMSF industry, – Self Managed government drawing a line in ASIC is processing limited backlog issues, such as licensing. in terms of how SMSFs interact – Financial Observer – Self Managed Super – Herald-Sun Super Magazine the sand and saying this is what licence applications is causing While she believes ASIC will with the Corporations Act.

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P016_In the Media_FW.indd 16 20-Jul-16 2:28:10 PM P017_From The Hub_FW.indd 17 7/21/2016 12:17:05 PM Upfront Upfront

LinkedIn Member snapshot: What’s on members’ minds? Rosemarie King FIPA Share your views with fellow IPA members by joining the IPA LinkedIn Group

— You cannot expect it to be something processed by Who are you? When was your fi rst exposure What is your role in the National the HR department – every I am Rosemarie King and I emigrated from to the IPA, and how did that Divisional Council? manager has to be skilled England in 1981. I am a public practitioner. I relationship blossom? I am the NSW Divisional President. [The in HR process for success built up a practice in Campbelltown, NSW, I was admitted as a member of the divisional presidents] meet throughout within the business. Of known as Rosemarie King & Associates. National Institute of Accountants [the NIA, the year to review applications for the course, you have to have I sold my practice in 2013, having started now the IPA] in 1988. It was during my time Board of Directors vacancies, and elect a specialist resource – the back in 1987, travelling to people’s homes of study, and I joined as a student member. candidates to the board. Guidelines for this approach is to really embed and drafting their return on site so they Once qualifi ed, I applied for the full process are contained in the Constitution. the importance of managing knew what the outcome of the lodgement membership. It wasn’t until the early 1990s people into the wider Where do you see the IPA in the next would be. In 1994, I extended my home that I started to get really involved. Being workforce for success.” so that the clients could come to see me. one of the few female public accountants 5-10 years? My practice grew, so in 1995 I was in a working as a sole practitioner, I found the The IPA’s growth during the seven years position to start employing sta . Then in local discussion groups to be particularly that Andrew Conway has been CEO has Markets outlook 2000, I moved my o ce to the UBD of male-oriented. This wasn’t bad, but the been incredible. I feel very blessed to “Britain’s vote to leave or Campbelltown. men did tend to be rather cagy with their have been there and can say that I know remain in the EU gripped knowledge when questions were raised this man. Andrew has a very dynamic markets for weeks. Bookies What is your background within the about various taxation issues. approach, as we have found with the have been giving better accounting industry? A few of us women formed our own amalgamation between the IPA and the Business nancial advice of late When I was young, there weren’t the discussion group, [thinking] we would IFA, creating the largest SME-focused than advisers.” opportunities for school leavers to go into have more knowledge in this industry if accounting body in the world. This gives planning exciting positions. So when I left school we networked together and helped each the IPA a much stronger voice globally. I “I now hold the view I secured a position as an o ce junior. I other. ‘WISP’ (Women in Sole Practice) would love to be a part of the IPA success that it does not matter Marketing tools order management, customer learned there that fi gures and business met monthly at each other’s homes, but as with gaining Royal Charter. The IPA can when you do your Leadership “Once the exclusive domain relationships and shipping.” do go hand in hand. I was very impressed the group grew, we needed more space, only go up from here. planning so long “Encouraging leadership and of large companies with as you actually do with the accounts department and as so we approached the NIA Sydney o ce people management skills at bigger budgets, there is now it and you refresh soon as an opening was available I applied. and were given the use of the conference every level of an organisation a plethora of marketing it at least every six Small business At 18, I had worked my way to the position room. This worked well for quite a number is key to success. Leadership automation tools that offer months but preferably “Systems and processes are of accounts supervisor. of years. matters everywhere. People incredible opportunities for By the time I arrived in Australia, I As convenor, I was constantly on every quarter.” important for small business. really only need four items at But when I speak to small large multinationals right had [gained] vast experience as an the lookout for subjects of interest for work: 1) a job that interests through to smaller-sized accountant’s assistant. So after securing a the group’s continuing professional business owners these days them, 2) a chance to progress in organisations as well.” position as an assistant to an accountant education, and this resulted in it growing they are telling me the two Economic growth their job, 3) to be treated with here, I decided that in order to progress even bigger. Again, the NIA o ce in things that can really help their “Reform is crucial, especially respect, 4) to have a boss who I needed to qualify as an accountant. Sydney allowed us the use of the training business right now are more Growth tapping the international helps them succeed.” So I worked hard and studied hard and room. It was [because of] my involvement customers and more revenue. opportunities qualifi ed in 1986. with the wonderful team in the Sydney experience and skill of And when they implement “Aussie accounting rms At the same time, I had exposure to a o ce, [that] I began to feel a real part of migrants that are relevant for marketing strategies to satisfy Practice need to rejoin the worldwide public practice and this is where I gained the IPA. That’s why I lodged my submission the Asian markets.” those two needs, that is when management profession where the vast much experience on the taxation side of to become part of the Divisional Board they will be looking for systems “The world of small business majority of accounting accounting. I have enjoyed this profession of Councillors – it was a way SMSF licensing and processes.” so much and still get great pleasure from for me to bond with the is becoming a leaner place. professionals are focused “Small APRA funds may The future demands a more on making clients more helping small businesses understand accountants who had Staffi ng the story that their fi nancial reports are become the WISP be the preferred option integrated approach to run pro table rather than telling them. group and the IPA. after the accountants’ everything from nancials “Human resources are defending those pro ts from exemption expires.” and payroll to inventory, everybody’s responsibility. excessive tax imposts.”

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P018_Member Snapshot.indd 18 20-Jul-16 3:45:39 PM P019_LinkedIn_FW.indd 19 20-Jul-16 2:23:54 PM Leader proﬁ le Leader proﬁ le

Turning PASSION into livelihood Director of wHeregroup Todd Hunter found a way to turn his passion for property into a successful, “I sat down in the sustainable business – but his road to success was interview and just told the guy all about less than conventional me: this is what I’ll do and this is what by Michelle La I’ll make happen. I think he just loved the enthusiasm” eregroup’s Todd create wealth – and we do it very interests with a home-buying agency unter has always much differently to anyone else on obviously involves a coordinated done things completely the market. effort, but reaching this level of W outside the bo. pen to Mr unter’s uniue approach to the business success has been a ourney of new ideas and not afraid to stir up property business relies on his walking 1 years in the making. controversy, Mr unter has built a the talk by fi rst personally investing property investment empire from the in locations in which he then advises From tyre ﬁ tter to ground up – one stamped with his clients to purchase. affable personality. Along with a knack for spotting mortgage broker weregroup, a property-buying property value and potential, Mr Right from the beginning of his agency and mortgage broking fi rm, unter has also demonstrated his career, Mr unter has taken an was established based on Mr unter’s savviness in seeing the opportunity to unconventional approach to success. keen eye for buying houses. build a niche business. was pretty young lived with ’ve always loved property – before There is a lot more opportunity a couple of mortgage brokers in a was a broker had already owned a in these places than what could sharehouse in Perth, he recalls. They couple of properties, he says. personally invest in. o then go and were living these fantastic lifestyles weregroup helps investors buy for my clients as well, he says. and thought, wouldn’t mind doing build property portfolios and Complementing his own investment that – that seems like a good ob!’

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P020_Leader Profile_FW.indd 20 20-Jul-16 12:10:52 PM P020_Leader Profile_FW.indd 21 20-Jul-16 12:10:58 PM Leader profile Audit Fund Super Managed Self Self Managed Super Fund Audit Audit Fund Super Managed Self

“So when I came back to Sydney,Services “I had to be a professionalCompliance and Mr Hunter now also has a and Compliance Services Services Compliance and I applied and got my way into firefighter because all I did every day new perspective on his personal Aussie Home Loans.” was put out fires,” says Mr Hunter, leadership. “This is as big as I With no formal qualifications or chuckling at the metaphor. “It was realistically want to get to,” he prior experience, Mr Hunter had probably one of my worst years in says. “I don’t want to have a huge talked his way into becoming a business, financially. It was a learning team anymore.” mortgage broker. curve, it was a mistake.” He attributes at least some of “I was basically a tyre fitter After reassessing the situation, he with his businessclients your success toprovide a changeto in looking you Are   Are you looking to provide your clients with with clients your provide to looking you Are  before that. I pretty much sold decided to strip back the team to four his approachaudits? SMSF to hiring – movingindependent priced better better priced independent SMSF audits? audits? SMSF independent priced better employees and start over again. myself to get into Aussie Home fixed a fromat hiringaudits for skillSMSF to insteadprovides Super Adept Adept Super provides SMSF audits at a fixed fixed a at audits SMSF provides Super Adept Loans,” he says. With Mr Hunter’s upbeat recruiting for personality. “I sat down in the interview and approach, “a mistake” merely our of all “You can keeping teach peoplewhile , whatfee competitive and and competitive fee, while keeping all of our our of all keeping while , fee competitive and just told the guy all about me: this felt necessary and natural to to do, but you can’t teachbased. Australian services services Australian based. based. Australian services is what I’ll do and this is what I’ll wHeregroup’s progression and personality,” he says. “You can’t make happen. I think he just loved the tough start simply shaped the teach work ethic; you either have    the enthusiasm.” business into a confident and self- within that work ethicperformed or youaudits don’t.SMSF need you Do Do you need SMSF audits performed within within performed audits SMSF need you Do That comes as no surprise. sufficient enterprise. “I want the right persontimes? and the turnaround reliable reliable turnaround times? times? turnaround reliable Mr Hunter’s effervescent energy for “Now we’re a team of eight and personality behind that. Even if I’ve slowly but surely put the right 10 within audits our complete I and team My My team and I complete our audits within 10 10 within audits our complete I and team My aiming high and achieving goals via to you theyfor don’tday a have theallows skill set,which I can days, business business days, which allows a day for you to to you for day a allows which days, business the road less travelled, as well as his people in the right positions,” he says. easily teach them that skill set.” lack of fear of traditional obstacles, . necessary if queries resolve resolve queries if necessary. . necessary if queries resolve is infectious. “I was with Aussie Home Loans an of services the engage already you Do   Do you already engage the services of an an of services the engage already you Do  for about 16 months,” he says. auditor? auditor? auditor? “Then I left, went out to become an independent broker and started to panel audit an implementing onsider C Consider implementing an audit panel to to panel audit an implementing onsider C the buyer’s agency business at the and pricing performance, audit improve improve audit performance, pricing and and pricing performance, audit improve same time.” can show you how to implement implement to how you show can I . bottlenecks bottlenecks. I can show you how to implement implement to how you show can I . bottlenecks Finding the right is It . auditors two only with business your n i this this in your business with only two auditors. It is is It . auditors two only with business your n i this 16 your increase also will and add value great a a great value add and will also increase your your increase also will and add value great a people The number of months Like many other ambitious business Todd was with Aussie clients. your with independence perceived perceived independence with your clients. clients. your with independence perceived start-ups, wHeregroup fostered Home Loans momentum and recruited fast. “I started taking on mortgage SMSF your from more for looking you Are   Are you looking for more from your SMSF SMSF your from more for looking you Are  brokers under me,” says Mr Hunter. 8 audit and letters management than auditor auditor than management letters and audit audit and letters management than auditor “I had a solicitor, accountant The number of and financial planner who would people on the ? reports reports? ? reports subcontract to me.” wHeregroup team consultation and opinions audit - pre provide We We provide pre-audit opinions and consultation consultation and opinions audit - pre provide We While the rapid growth of his best the in are clients your ensure to services services to ensure your clients are in the best best the in are clients your ensure to services team looked great on paper, in practice it did not translate into a is This audit. end - year the for possible position position possible for the year-end audit. This is is This audit. end - year the for possible position sustainable business. before opinion your seeking clients for great great for clients seeking your opinion before before opinion your seeking clients for great “I had all the pieces of the puzzle, transaction. risk higher a enter they they enter a higher risk transaction. transaction. risk higher a enter they but I think I did that way too quick,” he says, reflecting on the early stage” s ’ of the business.SMSF “I wasn’tsuccessful for knowledge and integrity experience, with Partner “ “Partner with experience, integrity and knowledge for successful SMSF’s” ” s ’ SMSF successful for knowledge and integrity experience, with Partner “ experienced enough as a manager at that stage to understand, and I didn’t get the right people on board. I had about 16 people at one stage!” free a Claim SUPER ADEPT 00 13 1300 ADEPT SUPER Claim a free free a Claim SUPER ADEPT 00 13 When it came to organisational fit during those earlycard days,data quantity2GB www.adeptsuper.com.au www.adeptsuper.com.au 2GB data card card data 2GB www.adeptsuper.com.au over quality became for a challenge.registering by by registering for for registering by a service trial on on trial service a [email protected] [email protected] a service trial on on trial service a [email protected] our website our 886 615 158 49 ABN: - LTD PTY SUPER EPT AD ADEPT SUPER PTY LTD - ABN: 49 158 615 886 our website website our 886 615 158 49 ABN: - LTD PTY SUPER EPT AD 22 August / September 2016 pubacct.org.au

P020_Leader Profile_FW.indd 22 20-Jul-16 12:11:09 PM Advert Template.indd 1 11/03/2016 11:46:06 AM Leader profile Leader profile

Technology and relationships Mr Hunter’s openness to “I was pretty young; I lived with a couple of conversation and relationship building seems to be the key to mortgage brokers in a sharehouse in Perth. his keeping up with innovation and change. They were living these fantastic lifestyles The current wHeregroup team would be “half ‘Gen X’ and half and I thought, ‘I wouldn’t mind doing that – ‘Gen Y’, and that works well”, says Mr Hunter. “The Gen Ys certainly that seems like a good job!’” keep me on my toes as far as the technology goes. “I come up with a lot of the ideas and then say, ‘Look, it’d be great if “You always have to be looking accountant’s role as facilitating we could do this’. Then they’ll come for those opportunities, and new possibilities. He was forthright up with a solution through IT and unfortunately, sitting behind a desk when detailing a recent example in all of the technology that’s out there from 9 till 5, they’re not going to which he wanted to buy property in to try and do what we want to do.” 100-150 come find you there.” the United States within his SMSF. He contrasts this with the earlier The number of people “Holding a bank account in the days of the business, when he had Mr Hunter refers to United States in your SMSF under accountants each year The accounting dial-up internet access and used connection normal legislation with the ATO is newspaper and Texta to research Mr Hunter has always had a close a no-no,” says Mr Hunter. property locations. working relationship with his “This was Todd being creative “I would write notes, do accountant. From wHeregroup’s again,” he jokes, “but my drawings, scribble and cross things very beginnings, an accountant has accountant took it all on board out,” he recalls. “My floor used to always been on board. and made it happen. She advised look like a rubbish tip at the end of However, his enthusiasm for me that we had to go for an ATO it and I would finally come up with pushing against convention meant private ruling, and we were the a location that fit all of my criteria. he found himself “outgrowing” second people in the country to “That process used to take his accountants roughly every do so. about three weeks. Software for four years. “She advised me that that’s researching property locations has “I’m fairly tax-savvy, I stay what we needed to do, she put certainly come a long way. Now I on top of things, I stay on top the private ruling together, we got can find new locations in about a of superannuation, I stay on approved and away we went.” day and a half. top of tax legislation – I like For Mr Hunter, the value of “I have a few of those old ‘fish to know a lot of what’s going having a strong relationship with and chip paper’ drawings still,” Mr on,” he says, “but my current his accountant extends beyond just Hunter laughs. “The staff have been accountant is awesome. She’s business operations, and he has saying we need to get them in frames probably the first accountant who witnessed the referral tree that can and stick them up in our office, and I teaches me things, so I use her be built through having a genuine think that’s not a bad idea!” knowledge considerably.” professional partnership. marketing and social media, Mr “I’m a little out of the box in Also, much of Mr Hunter’s day But while technology has helped Mr Hunter places great “It’s unfortunate, but for [some] the research component of his work Hunter again appears to take it all how business comes in the door,” involves not being in the office 9 value on creativity – as well accounting firms, the referral tree immensely, Mr Hunter emphasises in his stride. he says. “I social network without to 5. as on compliance – in their is all based around referral fees,” that it needs to be combined with A Google search for “Todd really even social networking. I “If I’m in here too much, my working relationship. he says. genuine relationships. Hunter” reveals a slew of get a lot of business that is just staff kick me out,” he says, “so I “I’m fairly out there in relation In Mr Hunter’s opinion, these “For me, researching and choosing contentious blog posts, savvy from people that I’ve met out and go play golf, I’ll meet three or four to ideas of what can and can’t be are not relationships but rather, a where to buy property is all about YouTube videos and an opinionated about. I’m just casually talking to guys and they’ll go ‘what do you done,” he chuckles. “I will always fee for service arrangement. the data initially,” he says, “but from Facebook account – all written with them and it could be three, six, do?’ and I’ll start talking.” bounce the creativity off her, and “That’s not the business I’m there, it’s all relationship-based.” Mr Hunter’s signature brand of nine months later and they say, you What Mr Hunter illustrates is a she will be as creative as she can after,” he says. “For me, I probably friendly controversy. know what, I need to go speak with strategy for building new referral within guidelines.” refer 100 to 150 people a year to Social networking Despite his active online presence, Todd,” he said. trees that even Google employees While compliance obligations accountants. I do it all for free, but At a time when SMEs are however, Mr Hunter’s focus remains “But I’m always just talking – it’s would be enviable of. can often be an obstacle to it’s a two-way street. That’s how increasingly turning toward digital on real world connections. never a hard sell,” he adds. “It works great,” he says. business, Mr Hunter views the they should be doing business.”

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P020_Leader Profile_FW.indd 24 20-Jul-16 12:11:17 PM P020_Leader Profile_FW.indd 25 7/25/2016 4:41:06 PM Importing and exporting Importing and exporting Making GLOBALlocal An increasing number of Australian small and medium- size businesses are expanding their operations beyond our borders. Import and export operations overseas can be very rewarding for SMEs, but it’s also risky business. What do accountants need to know before they dive in?

by Michelle La

26 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 27

P026_Importing Exporting_FW.indd 26 7/20/2016 12:35:01 PM P026_Importing Exporting_FW.indd 27 7/20/2016 12:35:48 PM Importing and exporting Importing and exporting

that accounting fi rms are well positioned to offer overseas trade advice, particularly within the SME sector. “We hold a very strong level of knowledge and network opportunities,” she says. “There are local people wanting to go overseas or international people wanting to fi nd compliance in Australia, but don’t want to go to the big four fi rms. “They don’t necessarily want to have the time or the money spent, or they simply ust don’t need that level of skill. They need something that sits between,” she says. Importing and exporting represents a lucrative, exciting space for SMEs – and for accountants who are interested in establishing a specialisation. “There’s going to be some really interesting things we can do here and we should take advantage of it now,” says Ms uissink. Free and easy ecently formed Free Trade Agreements have helped make y its nature, import potentially new markets, import/ expansion is still fraught with distribution, shipping and fees,” accountants, there is a niche but it easier for Australian SMEs and export trade has export has now become an open significant risk and many variables. he says. growing fi eld for which expert to establish overseas trading traditionally been a prospect for SMEs – and it appears Every business, product and evertheless, while there is advice is reuired, and suggest business in both import and Bdifficult domain to break that business owners are taking market is vastly different from signifi cant need for specialist there is an opportunity for export directions. into, with its high variables these possibilities in their stride. every other, so there can be no advice and keen interest in accountants to become a goto for ne practical benefi t has been and risk. According to a recent report generalist advice that can be overseas expansion, two thirds of the increasing number of SMEs the elimination of duties on However, the recent completion from Efic, the Australian adhered to across the board. the SMEs surveyed for Efi c’s needing import/export advice. goods, conseuently streamlining of Free Trade Agreements with government’s export credit agency, The need for specialised and SME Exporter Index did not seek Suzanne uissink, AIPA and trade and making it cheaper and China, Japan and South Korea one in five SMEs intends to practical advice on establishing any exportrelated advice. Practice Manager of Continuum simpler to complete transactions. has lowered significant barriers establish new overseas operations import/export markets can These trends indicate that for Accounting, supports the idea The gains are apparent for SMEs to Australian businesses seeking within the next six months. be daunting for SMEs in the access to key trading zones in Asia. However, while the potential for early stages. With easier access to huge, SMEs remains favourable, overseas As Peter Linane, Director of UV Wraps ‘n’ Straps, an importer, distributor and exporter of safety glasses, puts it: “It’s all basic when All you pay is “There are local people wanting to go you know it, but when you don’t know, it can be confusing.” overseas or international people wanting A chat with Mr Linane reveals commission on the slew of hidden details and to find compliance in Australia, but don’t costs involved, such as rebates, monies collected... product testing, regulatory body want to go to the big four firms” fees, payment terms and GST. “You need to know the outside from 11%! – Suzanne Buissink, Continuum Accounting costs that aren’t directly on the 10% discount against all commission rates Contact Nicky on (03) 9872 7243 product, but more involved with Free call: 1800 641 617 and for products... for you and your clients, www.prushka.com.au because Prushka is a proud IPA Partner. O ces across Australia 28 August / September 2016 pubacct.org.au

P026_Importing Exporting_FW.indd 28 7/20/2016 12:36:06 PM P026_Importing Exporting_FW.indd 29 7/20/2016 12:36:31 PM Importing and exporting Importing and exporting

“If you’re importing, there can be a certain wait time to get the product in. Likewise, if you’re exporting you need to be able to keep up with demand. You don’t want to run out of stock”

– Jamie Johns, Sky Accountants

such as b.box, a business selling “I think that with the ChAFTA baby products. at the forefront of things now, Winner of the government’s people are more open to the idea 2015 Small Business Exporter of ‘let’s do things’,” she says. of the Year Award, b.box These positive sentiments, punches above its weight in the according to Ms Buissink, stem international market, exporting to from the mutual benefits involved. 22 countries around the world. “There are things that can come “Korea is one of our biggest out of China that we can take markets, and because all of our advantage of, and things that we products are manufactured in have that they can take advantage China, the Free Trade Agreements of,” she says. “I think there is a have been a big help for us,” says very strong desire to be out there Monique Filer, co-founder and and trading.” Director of b.box. Given the new opportunities for “When we’re importing into open dialogue, Ms Buissink was Australia, we’re no longer having able to build key international to pay duties on those products. relationships in a short space of Therefore when we’re exporting time. As a result, she opened up out of Australia, we don’t have the pathway for one of her clients, to worry about duty drawbacks,” a software company that manages she says. “There’s a lot less medical records databases, to roll paperwork for us.” their product out to hospitals Furthermore, the Free Trade in China. Agreements have opened “It was really important up new dialogue between to break down that barrier businesses across Australia and and to meet people in China other countries. who want this as much as Following the coming into we do,” Ms Buissink says, effect in December 2015 of “and I think that was a really the China/Australia Free Trade empowering thing.” Agreement (ChAFTA), the IPA Her confidence in the sent a delegation to Beijing to partnership stems from its explore commercial opportunities. reciprocal relationship – with Continuum Accounting’s a quality product matched Suzanne Buissink attended with with the right distributor in the the delegation. On returning, relevant market. she reported fervour for new “It’s really a great opportunity trade opportunities, both from for our client, but also the end Australian and Chinese businesses. users as well,” she says.

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“Your distributor needs to setting up an effective inventory make money too,” she continues, system is crucial for import referring to the need for mutual export SMEs. benefi t. “That’s the only way it’s “If you’re importing, there can going to work. I’d rather make a be a certain wait time to get the little less and know that they’re product in. Likewise, if you’re going to reorder.” exporting you need to be able to As well as pricing, SMEs need to keep up with demand. You don’t do their homework to understand want to run out of stock,” he says. the local taxes and competitive orporate structure was also characteristics of each region, says vital for Ms iler when setting up Ms iler. b.box’s own distribution channels “You’ve got to be able to price in the .S. your product competitively in that “We didn’t want to be paying market that you’re exporting to,” double taxes in the S and in she says. Australia,” she says, and her Wraps’ eter Linane echoes accountant played a pivotal this advice and emphasises the advisory role. need to consider the exchange rate “It was really important that when determining product price. we set up that structure correctly “Every time you are quoted, or so that we only have to pay are quoting, you’re talking in the tax once.” S dollar,” he explains. “You need ash fl ow is another key import to make sure that you’ve built in export area in which accountants a buffer, so if the dollar fl uctuates play a crucial role. you won’t go broke. Mr Linane explains that there “It just comes back down to is a fundamental problem when basic mathematics like most receiving a container of imported business ideas do,” he says. safety glasses: “You haven’t even In the business for 16 years, seen it and you’ve got to pay Mr Linane has observed that the ST before they release the a high number of import glasses,” he says. exporters fail due to experiencing “What I did was contact my Bigger is better Knowledge is power unexpected costs and variables. accountant and he put me onto a Looking overseas can help an When it comes to the advice “That’s the problem, I think ST deferral. Now I pay it at the Australian business build in terms “Korea is one of our biggest that SMEs need to receive before – too many people going in end of the quarter and I have two of volume through its opening the importing or exporting, Ms iler is uneducated,” he says. months cash fl ow come in.” doors to much larger markets. markets, and because all of our adamant: “They really need to get And the best advice Mr Linane To ease cash fl ow issues, We’re looking at Australian their pricing right – I think this is summarises it best: “You need Austrade recommends accountants markets being limited, says products are manufactured in the hardest thing,” she says. to talk to someone else who is look at its Export Market Ms Buissink. aving a market like “The reality is, if you’re already doing it.” evelopment rants and the China come on to the menu ust China, the Free Trade Agreements exporting and you’re selling in Australian government’s export epands opportunities eponentially container loads, it’s to make A helping hand fi nance agency Efi c, to assist – so you’re growing a business. have been a big help for us” a smaller margin. And it’s Accountants are now well their clients fi nancially in New overseas markets also bring – Monique Filer, b.box for the distributor to make more positioned to help SMEs with overseas expansion. diversifi ed opportunities, she adds. than you.” many aspects of the import and Evidently, accounting fi rms n the case of her medical software Ms iler acknowledges that it export trade. are well positioned to assist client, Ms Buissink suggests that may feel counterintuitive for a Accountants play an SMEs’ navigating import and epanding into a new country could For b.bo founder Moniue Filer, The key to capitalising on these business to set its margins lower instrumental role in business export trade. lead to the evolution and development overseas trade has been instrumental larger populations, however, began than the distributor. structuring to handle operations, roving to be invaluable in of the product into new platforms. in scaling up her business. at home by brand building locally. “However, once you’ve sold minimisation of taxes, protection bridging the gap between local t’s providing opportunities ur largest eport market nternationally, people want it, you’re not holding any more of assets, liability and intellectual businesses and international for epansion, in particularly is orea – their birth rate and to know how well the product is of the risk. They’re holding the property across both the domestic markets, overseas trade could something like T, that you population is so much bigger than doing in your local market before risk,” she says. “There has to be and the international domains. be a rewarding niche area for Read this article they take it to their market, online at couldn’t foresee in the Australian Australia that we can really capitalise enough money in there for them to IA member amie ohns, accountants who are up for pubacct.org.au market before, she says. on that, she says. she says. promote your product. irector of Sky Accounting, says the challenge.

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P026_Importing Exporting_FW.indd 32 7/22/2016 9:42:06 AM P026_Importing Exporting_FW.indd 33 7/20/2016 12:40:40 PM Innovation Innovation

$1.1bn The amount National Innovation and Science Agenda initiatives are worth Igniting the over the next four years ‘IDEAS BOOM’ Innovation is central to a prosperous, modern economy. But what role – if any – should government play in fostering a more agile and entrepreneurial business environment?

by Aleks Vickovich

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ix weeks after being made funded; we think this is a great prime minister in what the start,” she said. BBC labelled a dramatic “[The election focus on S“coup”, Malcolm Turnbull innovation] is helpful as long faced the national press pack as it doesn’t politicise the issue to unveil his vision to remake in the longer term. Innovation Australia’s economy in the post- policy should be above politics mining boom era. and non-partisan.” “I’m here with my good friend Innovation adviser and and colleague, the Minister for respected financial services Industry, Innovation and Science, industry consultant Stewart Christopher Pyne, to usher in the Bell of Audere Coaching & ideas boom,” he said. Consulting had a similar take, The former barrister, Goldman albeit somewhat more blunt: Sachs MD and OzEmail CEO – “Public policy is doing us who, with his wife Lucy, has had the service of putting it on some success as an investor in the agenda, even though it’s early-stage ventures and start- not hard to be a little cynical up businesses – then proceeded about the political allure of the to outline the government’s new innovation spotlight,” he tells National Innovation and Science Public Accountant. Agenda (NISA). While the politicisation of these With a four-pronged approach issues should face reasonable $250m centred on “culture and capital”, scrutiny from the business The amount government will “collaboration”, “talent and community and the voting public, skills” and “government as an what is indisputable is the role co-invest with the private sector exemplar”, the agenda seeks to innovation can play in driving in a new Biomedical Translation bring about a more innovative positive economic outcomes. Fund to commercialise medical Australian economy and business Stephen Martin, a former research promising discoveries culture through a raft of tax, federal Labor MP and now CEO spending and partnership measures of the non-partisan Committee to help entrepreneurs thrive. for Economic Development of The policy announcement Australia (CEDA), outlined just was bolstered by a controversial how central it is in a speech to the $28 million innovation-themed International Summit of Business advertising push and became a Think Tanks. central plank of the Coalition’s “It is a given that countries nail-biting but ultimately successful need to innovate to maintain and national election campaign. improve living standards in an Insofar as the NISA has forced increasingly competitive global Indeed, in 2008, the Labor Brain Drain of young Australian the news media to pay attention to economy,” he said. government, then led by prime entrepreneurs and inventors to these issues and placed innovation Given the priority Mr Turnbull minister Kevin Rudd, launched a hubs like Silicon Valley, New “It is a given that countries need to innovate on the agenda, it has been a has placed on innovation policy, 10-year innovation agenda called York and Tel Aviv continues. to maintain and improve living standards in positive development, says the and the swiftness with which ‘Powering Ideas’, identifying the Moreover, according to CEDA, IPA’s Vicki Stylianou. he has sought to associate this need to “invest” more heavily in the proportion of joint industry an increasingly competitive global economy” However, speaking to Public agenda with his leadership, you world-class research, education and research patent filings – a Accountant from the United States could be forgiven for thinking that and international collaboration. generally-agreed-upon yardstick – following a speaking engagement government intervention on this The federal opposition has of innovativeness – has declined at an International Council of topic was a recent development. also made clear that in this substantially over the past Cutting and spending On the one hand, for example, Small Business forum in New York But federal governments of most recent election, it too decade, as has venture capital Both the Turnbull government’s the NISA offers concessional – Ms Stylianou warned that talk both stripes have launched supports greater government investment in general. NISA and similar initiatives tax treatments to “sophisticated alone will not be enough. countless initiatives to generate focus on innovation. And so the question remains: by Australian and foreign investors”, allowing them to “The IPA has consulted with the a more entrepreneur-friendly And yet arguably the Hills do politicians need to do more governments have sought to “support innovative start-ups” and government on [NISA]. Two thirds environment over the years – or Hoist remains Australia’s most to engender the Australian ideas accomplish their mission through help solve the problem of access of proposals impact members at least have waxed lyrical on innovative contribution to boom or are they, indeed, the a mixture of tax incentives and to equity finance, which is thought directly and apparently all are this subject. global commerce, while the obstacle itself? government spending. to be a considerable obstacle to

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P034_Comm of Innovation.indd 36 7/22/2016 9:44:10 AM P034_Comm of Innovation.indd 37 20-Jul-16 10:46:59 AM Principal Partner | Innovation

>$13m The amount government will invest to support the greater participation of girls and women in a range of innovative areas

can take to help create a more innovative culture within the “The best thing government can do to businesses under their remit. Mr Bell advises that, chief of all, increase innovation is reduce the high they stop looking for great ideas and start looking for problems. taxes and regulations that are strangling “Uber wasn’t created because a Australian businesses” corporate entity decided to launch Tickets now a new cab company,” he says. “It came about because some smart people noticed that people were sick of overpaying to ride in “It may be simply the challenges can play an effective role in substandard cabs and waiting 40 of our smaller population, or aspects shaping cultural attitudes that are minutes by the side of the road.” of our cultural attitudes towards conducive to innovation. on sale He also recommends “learning risk or even the good old tall poppy “The government can support an to say no and to eliminate” and syndrome,” Mr Bell suggests. ecosystem that fosters innovation; realising that your business destiny But it is not only prospective examples are Israel and Singapore,” lies in your own hands alone, not The highly anticipated Australian Accounting Awards will be held at the entrepreneurs that might be he says. those of your licensee or parent in need of a cultural shake- “Start-ups thrive knowing there company or manufacturer or any Four Seasons Hotel, Sydney on Friday 14 October. up; other stakeholders might is a national infrastructure that other third party. be too. Mr Bell explains that supports them, but at the end of The same, of course, could be This prestigious event recognises individual and group excellence in the accounting regulators and venture capital the day it is up to the company to said of the federal government. investors could also loosen their innovate and grow.” The message, therefore, is that industry, from the profession’s most senior ranks to its rising stars. somewhat “conservative” approach rather than wait for favourable to innovation. Going it alone policy environments and rely on Tickets are strictly limited, so secure your table today to avoid missing out on the In this way, government support Irrespective of the role played by helpful handouts, businesspeople industry event of the year. for innovation can play an important the state in fostering innovation who truly want to see a culture symbolic role, keeping it front of – and the debate over whether of innovation thrive within their mind for the media and voters and government-sponsored programs organisations, and the wider ensuring it stays on the agenda. hurt or hinder the goal of a more economy, should take the advice of To book your ticket, visit Mr Niederer says the example of innovative economy – there are one of the sporting industry’s most other countries proves government steps individual entrepreneurs innovative brands and just do it. www.australianaccountingawards.com.au or call Craig Lynch on 02 9922 3300

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P034_Comm of Innovation.indd 40 20-Jul-16 10:46:46 AM Accounting awards for IPA.indd 1 20-Jul-16 4:14:33 PM Digital marketing Digital marketing

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ompetition is fierce among Why? “It’s about positioning your “In the past, I think boundless opportunities on social accountants. With so many There are two main reasons why brand as a thought leader,” says accountants, some of them, have media for accountants to land talented practitioners George Photios, a campaign been a little slow to adapt. new work. accountants should be on social “We always talk to offering great service, the director at digital marketing “In fact, I know of a number “If you’ve got a good Twitter C media – to engage with existing accountants about most successful firms know they agency G Squared. of clients who have turned to presence, you can be hashtag clients and to win new business. need to stand out from the crowd. For existing clients, social media accountants who seem a bit more searching, you can be looking Whether it’s keeping existing While the thought of social can be used effectively to keep with it’, who actually have a for words that are being used, working out exactly who clients close or attracting new media may fill many accountants an accountant in the mind of a good social media presence and people might be looking for help their ideal customer is” clients, social media is a useful with dread, it really is one of client and to position yourself as a are active and engaging with their in a particular area, your area of tool that the wider profession is the most effective marketing trusted adviser. clients,” Mr Chaly says. expertise and you can connect – Peter Chaly currently underutilising. platforms available. “Accountants have a lot of That’s part of it – keeping your with them,” he says. clients so social media provides a existing client base happy and “I’d suggest offering them great opportunity to engage with maintaining channels, other ways some advice or content that “We always talk to accountants them and remain top of mind,” for them to communicate with you’ve previously produced and about working out exactly Mr Photios says. you and for you to reach them. help them out that way, and who their ideal customer is,” “By giving tips and updates, But putting your name or your build a relationship and engage Mr Chaly says. for example, tax updates or live fi rm’s brand out there can also with them.” Spend some time working out commentary on things like the pay dividends by exposing you to who your ideal client is and look budget, utilising social media potential new clients. In addition Where to start at what their greatest pain points to give real-time information to to providing existing clients The fi rst step for an accountant are, he suggests. people about what’s happening in information, posting updates and wanting to boost their social media “Is it the start-up business the economy and other practical information on social media can presence is probably the same as the looking to get off the ground who tips around minimising tax, they attract new business. fi rst step of any marketing program will need all the help with getting can really effectively reach clients.” Mr Chaly says there are – identifying a target market. up and running, or is it someone Doing this allows accountants to raise awareness of their brand and the services they offer. This in turn can get small business owners visiting accountants’ websites, following their updates and engaging with them. However, merely posting content may not be enough. Many people now use social media as an alternative communication tool to the traditional phone or even email. “These days, there is a much greater expectation out there for providers, accountants and others to actually have a good social media presence and to to build up audience and in promoting It pays to pay be responsive on social media your content. platforms,” says Peter Chaly, “Think about who your target managing director of marketing market is and then use Facebook’s Many accountants are reluctant agency Smartink. to pay for online advertising but interest-based targeting to serve ads to “Sometimes clients won’t pick George Photios from G Squared thinks the right person. up the phone, they might just this is a big mistake. “That paid element of social connect on Twitter or some other “Paid ads are something that is often has become so important,” channel and there is an expectation neglected,” he says. Mr Photios says. that you’ll be there,” he says. “Facebook for instance has become “It’s become a paid outlet and that While this may seem like an a paid channel, LinkedIn is a very often scares people off, but it’s still obvious part of modern customer paid-leaning channel as well, so you probably the cheapest paid outlet service, Mr Chaly believes it isn’t need to run ads on those outlets both out there.” an area accountants have been necessarily good at.

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How to convert likely increase the number of Any marketing professional email addresses you collect, you will tell you that social media is are still not going to get everyone. now one of the most important This, Mr Chaly says, is where marketing channels around. technology comes in. But many business owners, from “Let’s say they don’t click on a range of industries, still aren’t that banner and they don’t call convinced. A common bugbear of you or email you and they go these doubters is a belief that it’s away… a lot of people would difficult to convert social media think that’s a lost opportunity exposure into actual leads. – someone came but we didn’t It’s an issue Mr Chaly says he convert, we don’t have any is frequently asked about, and connection with them. Well, if admitting that converting from you’ve got a little tracking pixel social media can be tough. that you put on your website, the “You have got to earn it. These Facebook one for example, you days especially, you do have to can have that on there for up to earn the opt-in a lot more than 180 days, for six months more you used to,” he says. or less. “In the old days, you could just “The next time they’re on throw a form up on your website, Facebook, you can actually be say ‘opt in to our newsletter’ serving up ads to the people who and people would just put their have visited your website. You emails in, but now you have to can have another touchpoint produce really good content just to with them.” stand out.” Mr Chaly says there is a cost Mr Chaly offers some simple involved in this method but strategies that can turn exposure it can pay off. Converting on into leads. social media is about increasing “First of all, you can put a call touchpoints with potential clients to action within the content,” he and this type of tactic often says. “Somewhere down the page, reaps rewards. you could have a little banner “You have the first touchpoint, that has appeal to the reader to get them to your website, the about that topic they are having second was the website, third problems with.” touchpoint could well be an ad on For example, if a firm is running Facebook that is delivered only a webinar on a subject related to people who have been to your to a blog post, they need to put website so they’ve already got an a banner about the webinar exposure to you,” he explains. somewhere on the website. The Mr Chaly says repeated contact banner can be a call to action is key in any social media strategy to get people to register for as people need to develop a trust who is a seasoned business owner because social media provides “The world has been turned holds back many firms’ social the seminar. in you before they will consider who is perhaps dissatisfied with awesome tools for finding on its head in terms of content, media success. “If they register, you’ve got changing their accountant. their current provider and maybe these people.” especially lately. There is just “Formulate a good content their email address, you’ve their “People typically won’t churn their current provider is slow to so much really good content strategy, and not just regurgitating permission to get in touch with on first contact. It takes a while respond, slow to get work done What to post out there,” he says. content and sharing Sydney them,” Mr Chaly says. for the penny to drop and for or there’s a bit of a disconnect “Don’t put out mediocre Obviously, this strategy is not them to make the decision to The golden rule when it comes to Morning Herald articles or AFR between what the client wants and content make sure it’s really good, foolproof. Given the number of shift,” he says. “You can help that articles,” he says. what they’re getting, or are your content is: make sure it’s good. make sure that you are capturing content providers trying to reach along by increasing the number clients the mums and dads? Social media is such a fast those eyeballs. You want people to “Write something about what’s out to small business owners, of touchpoints that you have “ork out who your ideal medium that it can be tempting to really value the content that you actually going on, actually produce people are obviously not going with them. That’s one way of customer is or set of ideal disseminate quantity over quality are giving them.” that sort of content yourself. to give their email address to just maintaining contact with them Read this article but according to Mr Chaly, that’s a That sort of content is an asset to online at customers are, look at where they Mr hotios agrees, saying that anyone who asks. And even if you and maybe helping them cross pubacct.org.au are and how you can find them huge mistake. the quality of content is what the business.” have great content – which would that line.”

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P042_Social Media_FW.indd 46 18-Jul-16 12:32:13 PM P042_Social Media_FW.indd 47 18-Jul-16 12:32:22 PM Succession planning Succession planning

Securing futureYOUR

The bulk of Australian accounting ﬁ rms don’t have an adequate, or even any succession plan for their business. This has a direct impact on the value of a practice and the livelihood of its owner, so what’s the best approach for SMEs?

by Adam Zuchetti

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MEs put plans in place to With this in mind, we thought it Having an adequate succession grow their customer bases; would be useful for SME owners plan in place goes a long way they plan agendas for and operators for us to get some towards ensuring the financial Smeetings; they plan for the insight into the question of succession security of business owners, nasty effects of natural disasters, theft planning – what it involves, the particularly if they are selling to or other loss by way of insurance; options that are available, why it is retire, which in turn reduces the they even plan out daily schedules to best done in advance, the mistakes of pressure on government to provide ensure they can prioritise and juggle other business owners, and how to welfare support. tasks effectively. ensure you walk away with the best Succession planning also places So it is quite surprising that so deal for yourself and those left behind the business as well as possible many Australian business owners within the company. for continued operation, ensuring Renew your 2016/2017 membership today have no formal succession plan continuing employment for staff in place. The big picture and suppliers. and continue to enjoy the many beneﬁ ts of Mid-tier accounting firm RSM A recent study conducted by the And, as Ms Kotey points out, it has recently surveyed 2,000 NSW-based University of New England (UNE) flow-on economic benefits through membership. business owners, consultants and the employment of external partners, found that having an effective exit directors, and found 66 per cent of such as accountants, brokers and plan in place is not only important to them didn’t have a formal succession vendor finance providers. a business and its owners, but also to plan in place. the overall economy. These numbers are likely to be o rene no isit Associate Professor Bernice Kotey Why should you plan? replicated across the country, in The IPA has long been an advocate many different types of businesses, of the UNE Business School says this publicaccountants.org.au/rene is partly to do with the financial return of SMEs getting their succession according to RSM. plans in order, regardless of the size “Most business owners don’t start on investment that such planning can deliver to owners exiting a business, as of the business or the life stage of the or buy a business with the end in business owners. mind. But they should. Exiting the well as to the community that relies on the services of that business. The consequences, including business is inevitable, regardless of legal disputes and the associated “The continuation of small whether business owners intend to costs, of failing to plan for businesses in regional Australia run it until they retire, bequeath it to business succession events can is especially important, as they a family member when they die, sell be significant, says the IPA. In contribute to sustaining regional and it once it starts turning a profit, or some instances, these can cripple rural economics during downturns in any number of other options,” says business activity and significantly the resources sector,” she says. Patrick Flanagan, director of business reduce the wealth accumulated by “Regional location is a major services at RSM Australia. the business owner through years barrier to successful business exit. The reason for this lack of planning of hard work. is something of a mystery. Perhaps Other barriers include competition it is because no one is broaching the from large retailers, online shopping, subject with business owners, and inadequate support from local they themselves are more focused on council – such as unreliable forecast the here and now of running their of economic conditions – crime rates businesses than the nitty-gritty details and lack of access to medical and of planning their eventual exit. financial resources.”

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P048_Succession planning feature_FW.indd 50 7/22/2016 12:31:26 PM Advert Template.indd 1 7/19/2016 4:36:12 PM Succession planning Succession planning

how to value it’ – and that is the Whether you will require the starting point,” says Mr West. equity in your business to retire; A sale is one of the most The age at which you plan common ways in which to exit a to retire; company. However, according to Whether you want an immediate Mr West, it can take many months or a gradual exit from the business; or even years to attract a buyer, go How central you are to through due diligence and negotiate the business; the sale price and conditions. The requirements of fellow Another traditional option is directors/owners; to pass the business on to your The overall trajectory of your children. But this too often entails business (i.e. whether it is growing, problems, such as the children being shrinking or plateauing); unwilling to take on the business or Whether your superannuation has unable to afford to do so. a direct interest in the business An increasing number of smaller and/or its premises; firms are looking at alternative exit What you plan to do once you exit strategies – and often these are more the business; and about ensuring the business and Whether you want the business to its employees are protected than continue trading after you exit. securing every possible dollar of value for the person selling out. Taxing times “We are doing … things Of course, there is nothing more like employee share plans and certain in life than death and taxes, management buy-outs, where you and the tax man will want their can get some key staff [involved], share of the proceeds of any change and it solves two problems. One, of ownership of a business. the funding problem, because now “I’ve had people that forget or you’ve got the ability to fund it ignore the fact they owe the bank a through an employee share plan; couple of million bucks. They forget but two, it also reduces the risk, and to take into account the tax, so the that big risk … about [the future of] business may be worth $5 million, key employees,” says Mr West. but what you’re actually going to In some instances, he advises, keep is probably $3 million because it is not the business itself that is you’ve got to pay tax and there’s worth selling, but rather the assets it transaction costs and there’s stamp has accrued. duty and there’s all sorts of other “Maybe they are better off to not things,” says Mr West. worry about the business but sell “That’s where … that valuation “Smart clients come to us early you need time, you need to make business’ value to ensure the best buyers there. It just hasn’t been the building, because that would is quite important, because you’ve and say, ‘I’m five years away but sure the staff transition over, the possible payout. prepared properly.” make a lot of money, or sell some got to understand exactly what I’m thinking about exiting – what clients transition over, and those Exploring these issues too equipment off or sell some assets to we’re talking about – how much [is do I need to do? What do I need things all take time. They are just late can have potentially What are my options? a competitor,” he says. the business worth]? What are you to worry about? How do I get never going to happen quickly.” devastating effects. The good news is that you don’t going to pay in tax? What’s going to ready?’” says Craig West, chief Indeed, what becomes most “The first thing is, they generally necessarily need to know which Getting it right be left over?” executive of succession planning apparent when business owners have to delay their retirement or path you want to take before Of course, the option you choose Therefore, it’s important to keep experts Succession Plus. begin to examine their exit is their timing has to change. We just starting work on your plan. will be highly personal – no one your valuation in mind as what you “Others leave it too late, and it the sheer scale of the task at have to say, ‘You can’t do it that Regardless of the ideas you may but you can make this decision. have to work with, rather than the just becomes a problem,” he adds. hand – including the number of quickly if you want to maximise be toying with, the first step is There are several considerations amount you will receive at the end “We say to people, ‘You really relevant stakeholders (everyone value’,” Mr West says. almost always the same. that may influence your of the process. need three to five years to get it from co-directors and employees “It’s a little bit like going to a “Most small business owners choice, including: At its most basic, succession is right, to do it properly, to maximise through to the ATO) and the level real estate agent today and saying have no idea what their business is The actual value of the business about success. Plan ahead to ensure the value, to make sure you get of documentation and preparation you want to sell your house worth. So they come to us saying, and any assets it owns; the blood, sweat and tears you have paid out, to make sure the funding required at each step of the way. tomorrow – they will be able ‘I’ve got a business, I don’t know If you have children, whether invested in your business – over Read this article online at works, to make sure the business And then, of course, there is to sell it, but they won’t get the if I can sell it, I don’t even know they have the interest and ability years or even decades – deliver the pubacct.org.au survives’ … and to do that properly the process of maximising your price, they won’t have all the right what it’s worth, I don’t know to take over the business; success you deserve.

52 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 53

P048_Succession planning feature_FW.indd 52 7/22/2016 12:31:55 PM P048_Succession planning feature_FW.indd 53 7/22/2016 12:32:13 PM Member profile Member profile

“We think that’s our niche [SMEs with between $0 and $2 million in annual revenue], where we think we can make a difference. “Once businesses get bigger than that, they probably want that one-to-one advice, and we can let other accountants do that.” Based on his experience in both software and accounting, Ready to Mr Dawson says his theory is that specific advice isn’t scalable, because it relates to a one-to-one relationship with someone. “So if you want to grow fast, you need a lot of senior LAUNCH accountants and you’re selling time for money,” he says. “We’re For Luke Dawson, digital disruption and a shake-up of the trying to build a business where it’s scalable, where compliance world present accountants with some of the biggest we’re selling results for a fixed opportunities yet – if they’re willing to embrace change price. It’s basically a product type service.” A key feature of Mr Dawson’s business plan is the pursuit of the by Michelle La “right” client who would benefit from Rocket Factory’s consistent service offering. t was a particularly exciting “Rocket Factory is my take on extensive career spanning “At Resonate, we did a fixed- day to call Luke Dawson, IPA what an accountancy practice more than a decade in tax and price model for all of our clients, member and founder of new should be,” Mr Dawson says. commerce accounting. Extending but they were all different. I think accounting firm Rocket Factory, “But it’s a bit different to what his expertise into the technology that’s where the problem lies – I Name: Luke Dawson for an interview. everyone’s talking about doing,” sector, he founded accountancy that everyone’s got a different I asked Mr Dawson why there he adds. software Stryke Tax. Company: Rocket Factory service level,” he says. was no information available on While the conversation could Prior to the launch of Rocket “So I’m trying to build his latest venture, to which he only paint an early vision of Factory, Mr Dawson was IPA status: Member something where everyone has the replied: “Well, that’s because it Rocket Factory, Mr Dawson’s co-founder of a Perth-based Location: Albany, WA same service level and it’s one of only started today!” enthusiasm for innovation accounting start-up, Resonate three prices – that’s it.” Rocket Factory – a new start-up prompted a zealous discussion Business Consulting, which he Drawing on his vast experience for Mr Dawson, a tax accountant about the accountancy industry in in taxation accounting, started three years ago with two What’s most intriguing with the accountant and the client, – is a digital accounting firm an era of emerging technologies. Mr Dawson has identified the friends, who are also owners. about Rocket Factory is but rather with the firm and the with ambitious plans to build In Mr Dawson’s view, there is common needs of small businesses One of the partners recently Mr Dawson’s ambitious vision client,” Mr Dawson explains. a futuristic business focused on ample opportunity to build better that would fit Rocket Factory’s bought him out of this venture to create a digitally branded Rocket Factory’s model is automated software. accounting firms in Australia. one-size model. and Mr Dawson took some of accounting service. a radical shift away from the “I think that a lot of his preferred clients and started “They don’t [necessarily] want accountants stick with what they “I’ve been playing around in the traditional face-to-face relationship that one-to-one advice; small Rocket Factory “as the next step”, know – they don’t want to push software space in the last couple between accountants and clients. businesses can be price sensitive,” he says. “I’m trying to build the envelope from a business point of years,” he says. “The things that Rather than varied individualised he says. “We’re trying to give something where of view,” he says. “They’re happy matter to a software company are accounting, Mr Dawson’s business them the things that they need and making the money they’re making, Building a scalable things like scalability and take-up model aims to streamline and not try to upsell them into things everyone has the same the way they’ve always done it. digital accounting firm by users. We have some different automate necessary services that they don’t. They don’t see reason to change. Rocket Factory is a digital KPIs that you measure compared tailored to the specific needs of “Because we’re heavily focused service level and it’s one “I’m more focused on where accounting firm targeting small to an accountancy practice. small businesses. on using technology to do the technology is going and trying to businesses that might range “So my take is that I want to “We’re offering completely heavy lifting for us, it’s easier of three prices – that’s it” build something.” from the $0 start-up stage up to build a practice that’s scalable – fixed-price fees based on revenue to charge less and deliver a Mr Dawson has had an $2 million in revenue. that’s not reliant on the relationship turnover for the client,” he says. better service.”

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P054_ Member Profile_FW.indd 54 20-Jul-16 3:52:01 PM P054_ Member Profile_FW.indd 55 20-Jul-16 3:52:12 PM Member profile Member profile

says. “So what I’m trying to build is something that is making compliance price sensitive.” “I think that a lot of accountants stick with At a time when the industry is moving from compliance to what they know – they don’t want to push reliance-based accounting tailored towards highly personalised and the envelope from a business point of view” flexible services, Mr Dawson’s vision seems to stand firmly against the current. be that place that points people program, Mr Dawson went on to Rather than shifting away in the right direction then that’s successfully achieve his Graduate to a higher service business, fine,” Mr Dawson says. Certificate, then his Masters Mr Dawson is instead “I’m happy to give up the of Commerce. enthusiastically driving the revenue because they don’t fit our “Because I didn’t do university downward value of compliance model, but I want to help them to start with, the IPA had the best accounting through Rocket find the right accountant for what pathway for me. And probably the Factory’s scalable model. they need,” he says. least pretentious as well,” he says. “We have to stick to our guns “Traditionally, accountants have Recently, Mr Dawson attended and say that our business is the always grabbed every client they the IPA’s regional congress in compliance and the scalable model. could, without thinking if they Western Australia. “They asked The stuff outside of that we’ll give fit their ideal client profile. We’re me to speak there, which was up that profit to maintain what building our business based on the interesting! That was good,” he our business is,” he says. clients that we want. That’s who says, “it was good to meet the “A lot of accountants don’t we’re chasing; the ones that don’t fit other practitioners that went.” like to do that – they try to be our model we don’t take on,” he says. The IPA’s focus on practical everything to everyone – and “But we’ll help them find a experience and application offered that’s why you can’t scale up an different accountant based on more value to his membership. accountancy firm.” what they need,” he adds quickly. “I’d say they represent the Rather than compromising his Steadfast and focused, one accountant a lot better than the business model, Mr Dawson’s couldn’t help but feel excited other two bodies,” he says. solution to meeting the needs about Mr Dawson’s rebellion “The IPA is a bit more of a of those that sit outside Rocket against the trends, to innovate battler, like they’ll go into battle Factory’s offering is a reliable upon what others are trying to for us a bit more than the others. I referral service. avoid in the accounting industry. think we get more out of our fees “You can’t be an expert in that we pay each year.” everything, but we can be an The right path Mr Dawson commended expert in tax. We might not be While Mr Dawson’s current focus the IPA’s advocacy concerning an expert in helping a specific on small business aligns well recent ATO legislation covering business get out of a specific jam with IPA’s support for SMEs, his financial planners. but we know someone that is,” journey with the IPA began much “The IPA was really vocal in he says. earlier in his career. that and they spent a lot of time “We can work with that “The path to becoming a full trying to get that right,” he says. business and that person to IPA member was a good fit for “They really took the lead on help them fix their problem me because initially I did an some of those conversations.” – and that’s the way of the Advanced Diploma of Accounting He is positive about his sharing economy.” at TAFE, I didn’t go to university,” experience as an IPA member: Like website Airbnb, which he says of his transition from “They’re trying to help gave consumers alternative study to practice. accountants, and not just IPA Automating the real-time business monitoring and tax compliance point of view – accommodation options and “So I did that straight out of members but accountants in compliance game efficient tax service. that’s all offered,” he says. so disrupted the hotel industry, high school and then got a job general,” he says. “Business activity statements, Mr Dawson sums up Rocket Mr Dawson believes the distributed as a tax accountant. The IPA As he prepares his start-up venture By leveraging client data using instalment activity statements, Factory as “a compliance- notions of the sharing economy made sense because they offered for take-off, the future looks bright available software – such as ero, fringe benefit tax returns, income based business”. could change the role of accountants a different entry pathway to CPA for IPA member Luke Dawson. Receipt Bank, Crunchboards and tax returns, financial statement “Everyone keeps saying that to benefit small businesses. or CA – that worked for me,” With his ambitious goals, Rocket Mr Dawson’s own Stryke Tax – preparation – basically everything compliance is dying and it’s “You can shop around, you can he says. Factory is an accounting firm to stay Rocket Factory hopes to deliver a that’s related or reuired from a becoming price sensitive,” he go to different places. If we can After completing the IPA tuned into.

56 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 57

P054_ Member Profile_FW.indd 56 7/22/2016 9:51:09 AM P054_ Member Profile_FW.indd 57 20-Jul-16 3:52:26 PM Opinion

Opinion

Matthew Kidd Adam Goldstien Ian McKenzie Wayne Leggett Matthew Kidd is group managing director Adam Goldstien is director of Skeggs Goldstien Ian McKenzie is the owner of IMK Accountants Wayne Leggett is director of Paramount with Omniwealth Financial Services Group

360DEGREES Earn more, and no need to refer Adds value and builds trust Meets need for holistic advice Increases credibility with clients

Accountants don’t need the same licence As the principal of an accounting and I have been an accountant – both As much as we may hate to admit this, the What are the benefits of being as 007 (that could get a bit messy) to get financial planning licensed practice, I can commercial and now public practice – since reputation of financial advisers – be they ahead of their competitors, but they do need confidently say that accountants and financial the early 1980s. accountants, finance brokers or financial licensed to give financial advice? to be licensed to give fi nancial advice. The planners are very different beings, not good Since then, we have seen financial planners – isn’t exactly the envy of the old school strategy of referring is dying, or bad, better or worse – just different. deregulation implemented and reviewed, other professions. and clients are starting to demand their Our best advisers combine the best of federal inquiry into the banking and financial Little wonder that statistics suggest four accountant and fi nancial planner either be the both professions. services sector, one after the other. out of five Australian adults do not engage the same or at least be under the one roof. Research by Macquarie Bank, The new After 35 years, my opinion is that the services of a financial adviser. Accountants must decide whether they value equation, 2015/16, concluded that whole system – inclusive of accounting, Given this low base of credibility and want to be more of a complete adviser or 79 per cent of the most profitable practices tax and financial advice - is messy respect, any measures we can implement stay the same and refer clients to an external believe success is driven by adding value to and complicated. to improve our image in the eyes of a source. But there’s a problem with the latter. existing clients. Nevertheless, accountants who don’t get prospective client have to be worth the effort. With the cost pressures accountants are If your clients see you as their trusted proper training and licensing in the areas of In this day of information at our fingertips, now under to do cheaper personal ITRs and adviser, why would you outsource that financial advice are not doing themselves or we can no longer assume that clients are SMSF returns versus the vast amount of relationship to someone else? their clients any favours. prepared to take our bona fides at face value. services a good fi nancial adviser can o er, With this framework in mind, I see the Why? Because your average client these Being able to lay claim to being authorised the referral model simply doesn’t add up. following benefits of licensing for accountants: days, quite simply, needs more than simple by a holder of an Australian Financial Services Say an accountant gets referred a young 1. Proactive advice – recent surveys have tax and accounting advice. Licence (AFSL) to advise on the subject at professional couple by a fi nancial planner indicated the number one reason clients In fact, people in business should hand only serves to enhance your esteem in (who they’ve been referring to for years) to leave their accountant is due to their reactive be getting holistic personal and the eyes of the client. do their PAYG ITRs, pretty basic stu . The versus proactive advice; business advice. More importantly, the requirements accountant does it for $900. In return, the 2. Thoroughly understand our clients’ advisory Any public accountant who has not imposed upon you by the AFSL will ensure fi nancial planner (who has multiple disciplines) and taxation needs – taxation as a primary undergone any proper training and licensing you are indeed qualified to advise on the gets referred a similar couple from the motive can often clash with other personal/ since Joe Hockey’s FSR in 2002 is way product or service in question. accountant for fi nancial planning advice. financial objectives; behind the eight-ball. This gives you the peace of mind of being Now, this is where the water muddies 3. Reduce risk – tax advice can still be I think some – if not many – accountants confident that you know your subject, as well a bit, as the way fi nancial planners charge ‘financial product’ advice. What does and have chosen to outsource the areas as being of comfort to the client, knowing that clients can vary i.e. fee for service, retainer, does not constitute financial product advice? of financial advice expertise or have your advice and expertise has the backing of 1 per cent of FUM, keeping/rebating insurance How many times do clients ask “Should I” or authorised representative status under an entity bearing the imprimatur of ASIC. commissions etc. Clearly, the planner is “Is this the right thing to do”? Answering these someone else’s Australian Financial Whether you intend to be actively involved going to earn signifi cantly more from the questions requires a licence; Services Licence. in implementing strategies of this nature referral than the accountant will from them. 4. Planning gives our clients certainty in their Importantly though, if you’re not going or simply want to avoid falling foul of the Furthermore, the value each of the referrals future to live their lives today; to become licensed and provide a holistic regulator, this credential is invaluable. adds to each of the businesses is poles apart. 5. Our clients are seeking more holistic advice range of services in-house, it’s imperative Admittedly, the initial and ongoing Just one referral can mean a referral from their accountants; and finally you outsource to partners you can trust, obligations to continuing professional partner is making more money o a client 6. Greater share of wallet – more value-added whether they be financial advisers and development are not insignificant. But, as than the referee. Why? Because one is services, greater profitability and more planners, SMSF auditors, SMSF specialists professionals, we understand that these are providing fi nancial advice and one isn’t. engaged clients. or risk advisers. simply the ‘tickets to the game’.

58 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 59

P058_360_Degrees_FW.indd 58 7/22/2016 9:53:28 AM P058_360_Degrees_FW.indd 59 7/22/2016 9:53:47 AM Opinion

of commerce, state and the Treasury and heard from a range of US congressmen. We then had individual meetings with Opinion congressmen and their advisers. Apart from trade, tax was the other major area of discussion. Business tax reform might happen next year but is there political will – especially when many Looking offshore for see themselves as losers in tax reform? Questions around base erosion and profit shifting (BEPS) were raised, domestic growth including concern about Australia’s proposed Diverted Profits Tax. A recent trip to the US reaffi rmed a long-held IPA view: Other themes addressed included that for the Australian economy to grow and prosper, it is vital the next administration will be looking at ways to revitalise China. There is a that more SMEs and small businesses become exporters willingness to be tougher but it needs to be well-informed toughness and there was also caution about precedent and by Vicki Stylianou the need not to make mistakes. It comes back to the TPP and ensuring Vicki Stylianou is general that the US is seen as reliable and manager, advocacy and credible since it was the US that initiated technical, with the Institute of Chambers of Commerce. The TPP or 2.5 per cent to 1.2 per cent. Growing it and walking away from it would send Public Accountants was the priority topic on the agenda, trade relative to GDP is a good way to the wrong signal. It is likely that if it gets with the main objective being to grow productivity. through Congress, then it will be during persuade congressmen of the need to However, for some congressmen, the the lame duck session – between the vidence suggests that trade their businesses and clients of the profession is becoming increasingly pass the agreement. The door-knock strategic considerations get trumped election and the presidential inauguration. liberalisation has been the main opportunities to grow and prosper globalised. The IPA must assist members also visited major US think tanks and by local, employment arguments. The One interesting and possible emerging engine of growth for the world through international trade. With the in realising the potential in trade and trade held a roundtable with the Australian US would gain $127 billion per annum trend is protectionism: US candidates E economy. This includes increases signing of free trade agreements with agreements by facilitating members ambassador, Joe Hockey, and from the TPP while more than 100,000 are giving protectionist speeches and in real income, increases in income per three of our largest trading partners, to become trusted business advisers embassy advisers. employees per annum would be displaced of course we have now witnessed capita and increases in capital formation. these opportunities come into in trade, export and investment. As an We heard a variety of views on how to – but with gains to the overall economy of Brexit, with a desire to be sovereign Each country can benefi t from an sharper focus. organisation, the IPA must grow and be persuade congressmen of the merits of about 10:1. Transition costs are painful but and independent without falling into the increase in demand for exports and rising One of the most signifi cant trade recognised on the world stage if it is to the TPP, the world economic view, the time is limited. hands of populists. So, there are huge real incomes and total imports in other agreements – which has been signed compete and gain recognition for the rise of China (viewed through the lens of At the US Chamber of Commerce, we headwinds with free trade and we really countries, with the e ects of growth (but not yet passed into legislation) – is benefi t of members. its activities in the South China Sea), the heard that Donald Trump hasn’t said he need to explain the benefits in a more spilling over to other countries. the Trans-Pacifi c Partnership (TPP). This To this end, the IPA engages in several role of Australia on the world stage and is against trade; he has said he is against convincing way. Strategic issues may There are also direct benefi ts for agreement, which covers 12 countries activities that promote and facilitate the US-Australia relationship. some trade agreements the way they help with some congressmen – TPP business, including increased sales including Australia and the US, is arguably liberalisation in accounting and other On the TPP, we were advised to really have been negotiated. It was also pointed as part of a suite of things in the China and profi t, spreading risk, using excess the most ambitious trade agreement professional services. push the angle about what the TPP out that he has no tax policy, just some strategy. There is a need to stress that capacity, overcoming seasonal or negotiated in the past several years. It The IPA participated in the annual means for the position of the US in the talking points and a speech. job losses are not because of trade, they cyclical demand, expanding skill sets and covers more than 36 per cent of world conference of the International Council region – that is, the geopolitical aspect is Along with the US Chamber of are because of productivity gains. improving the ability to compete. GDP and 26 per cent of world trade. The for Small Business, with the theme of the very important. We heard about the need Commerce, our delegation also engaged For the first time in 50 years, trade Tapping into the emerging and vast IPA has members in 10 of the 12 TPP United Nations Sustainable Development for America to write the trade rules, but with the US Trade Representative Office markets of the Asia-Pacifi c region is countries. It is the fi rst trade agreement Goals. The IPA Deakin University also to stress job creation – that is, high for China, Japan, Korea, APEC, Southeast growth is slower than growth in global widely viewed as integral to the continued to include specifi c provisions to facilitate Australian Small Business White Paper paying jobs and in the right places. Wage Asia and the Pacific. We were advised GDP. Trade has become a scapegoat, growth, not only of Australia but also of trade by small business and SMEs. was presented under the heading, inequality has become a huge issue in that the administration is working very but there are other problems, like other Western nations. However, there are major obstacles in Boosting Small Business Productivity. the US, as it has elsewhere. The US will hard to get the TPP passed and that it is corporate tax, over-regulation, structural The Institute of Public Accountants the US, with Congress not yet convinced Trade, export and investment were be left out because other countries are fundamentally important to US interests in budget deficits and so on. Now that the fi rmly believes that accountants, as the TPP should be legislated. common themes presented by people going ahead with trade agreements. Asia. There was also a sense of urgency Brexit vote and the Australian federal the trusted business advisers to small Like countries and corporations, from more than 56 countries. Trade agreements have become and that we can’t wait a couple of years, election are over, we will wait and see businesses and small to medium-size accounting bodies must also expand Another event is the annual ‘door- more critical since productivity growth while it is also unlikely any country would what happens with the US presidential enterprises (SMEs), should be taking beyond the borders of a small, mature knock’ in Washington, DC undertaken in all developed countries is declining. be prepared to renegotiate. vote and whether the TPP passes advantage of this position to advise market, recognising that the accounting by the Asia-Pacifi c Council of American In the US, it has gone from 2.4 per cent We also engaged with the departments through Congress.

60 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 61

P060_Vickys_OS_Trip.indd 60 7/22/2016 5:41:35 PM P060_Vickys_OS_Trip.indd 61 7/22/2016 5:42:16 PM Opinion

Opinion

ATO audit: too much oversight by scrutineers? This was the issue the Treasurer asked the House of Representatives Tax Committee to investigate in its inquiry into whether the current level of oversight of the ATO is appropriate Tony Greco FIPA is the IPA general manager of technical policy. He can be contacted on (03) 8665 3134 or at [email protected] by Tony Greco

he Australian Taxation agencies. A high level of scrutiny compliance. This in turn requires to ensure the principles governing the despite taxpayer responsibilities powers and responsibilities, effectively f this was the first budget in a Office has stated publicly it is appropriate to prevent lapses taxpayers to have trust and confidence charter are adhered to is essential increasing substantially, recognition of require high levels of transparency three-year term, it would look believes it is under too much in performance which can have a in the fairness and efficiency of the to ensure taxpayers can trust the taxpayer rights has not kept pace and and public accountability. Governance decidedly different. We need to be T scrutiny, and this needs to widespread impact on the public. tax system. Taxpayers have certain fairness of the tax system. may have fallen behind. arrangements need to strike a balance Irealistic about the expectations of be toned down as it diverts a lot of Over the years, there have been expectations when they interact with In the past few decades, the The size and sophistication of ATO between maintaining the independence what the budget can achieve given resources that could be better used examples of the ATO being dismissive of the ATO. These expectations are responsibilities placed on taxpayers operations have grown in response of the commissioner and ensuring a the background scenario facing the elsewhere. The tax office cites issues feedback, especially when it conflicted formalised in the Taxpayers’ Charter have increased through more complex to policy changes that have expanded fair and efficient tax system. new Treasurer Scott Morrison’s first of duplication and overlap, including with an entrenched position. This is which sets out taxpayers’ rights and tax systems, anti-avoidance rules the revenue base. The ATO is the The commissioner is required by law budget. The Treasurer has a difficult cost to government. Unfortunately, less likely to be the case today, given obligations, as well as actions they may of even greater scope, increased second largest government agency and to report annually to Parliament on the job to produce a plan to stop the the majority of respondents who have the cultural changes in the ATO of late, take if they are not satisfied. disclosures, and an environment employs more than 20,000 staff. ATO’s operations and appear before deficits, while providing some goodies made submissions to the inquiry do but considering the sheer size of the The ATO has considerable power and of tax legislation in which constant The commissioner of taxation has a parliamentary committees to explain to reinvigorate the government’s not support this view. organisation, there still remain pockets resources, and it is therefore important change seems to be the norm. More is statutory independence to administer its administration. The complexity stalling fortunes. The ATO is a key agency that interacts that are slow to adapt. Therefore, that there are checks and balances for expected of taxpayers today. federal taxes. This independence means of the tax system makes it difficult It would be unrealistic in an election with all businesses, both small and external scrutiny is required to provide taxpayers to address this imbalance of The Institute of Public Accountants the commissioner makes the decisions for parliamentarians to examine the year to expect any significant reduction large, and individual taxpayers. Given independent assessment that ATO authority in the ATO’s favour. It is also is a member of the Asia-Oceania Tax about how to implement and apply the operations of the ATO effectively. in the size of the overall federal deficit. this important role, it is understandable services are performing as expected. important to balance taxpayer rights Consultants’ Association (AOTCA). tax laws. The role of the commissioner Members of Parliament are not subject The best we can hope for are signs there is more scrutiny of its functions Australia’s self-assessment tax against the ATO’s ability to discharge its The AOTCA has been working is not overseen by a board of directors matter experts. It is for this reason that of a credible plan towards the road to when compared to other government system relies on high levels of voluntary administrative duties efficiently. in collaboration with two other nor is there any meaningful day-to-day these parliamentary examinations of budget surplus. When the leadership of The overriding purpose behind professional bodies of tax advisers, CFE ministerial direction or control compared the ATO cannot be relied upon to fulfil the Liberal Party changed in September the Taxpayers’ Charter is to foster a and STEP, to develop a Model Taxpayer to other government agencies. an active role in the cycle of public last year, everything was back on the “The ATO has considerable power and relationship of mutual trust, respect Charter. The IPA supports the 10 key Treasury ministers are accountable accountability of the ATO, thus the need table in relation to tax and responsibility between taxpayers rights and responsibilities of taxpayers to Parliament for the performance for several agencies to complement resources, and it is therefore important and the ATO. Its objective needs to be and tax administrators embodied in the of the ATO, but they have no power these parliamentary accountabilities. that there are checks and balances for framed in a way that aims to reduce Model Taxpayer Charter. to direct the commissioner’s One of the main agencies for the cost of compliance, increase The Inspector-General of Taxation is administration of the tax laws and scrutinising the commissioner’s taxpayers to address this imbalance of the quality and efficacy of willing currently conducting a review into the have limited involvement in governance work is the Inspector-General of compliance, and ensure all taxpayers Taxpayers’ Charter. In its submission of the ATO. The independence of the Taxation, an independent statutory authority in the ATO’s favour” are treated equally. External scrutiny to this review, the IPA stated that ATO, along with its very significant agency. The Inspector–General of

62 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 63

P062_TonysColumn_FW.indd 62 18-Jul-16 2:42:46 PM P062_TonysColumn_FW.indd 63 18-Jul-16 2:42:57 PM Public Accountant | Technical

Opinion

Taxation’s role is to examine systemic scrutiny through the lens of a taxpayer provides taxpayers with a single, tax administration issues that a ect and against a taxpayer charter. specialised scrutiny agency for businesses or individuals. The o ce The only other agency that conducts the handling of both individual tax was established in 2003 to strengthen detailed reviews of ATO programs, complaints and systemic tax reviews. the advice given to the government policies, projects and activities is the This has been a recent improvement about tax administration. It reports Australian National Audit O ce (ANAO) in the oversight framework of the ATO. its recommendations for improving which undertakes performance audits. The Inspector-General of Taxation’s 66 68 70 tax administration to the government. These two agencies communicate their future review work plans could Many of the reviews undertaken have proposed activities with each other to cover systemic issues highlighted by Trusts and the new small Structuring non-commutable Fintech and cyber security resulted in substantial improvements avoid any overlap in reviews. trends in complaints, enabling the business tax rollover reversionary pensions Businesses can’t afford to neglect in tax administration. The ATO has o ce to respond more quickly to The o ce of the Inspector-General In the last issue, we outlined the Implementing non-commutable online security, and the cyber security implemented the majority of the emerging issues. The policy decision has recently absorbed the tax important new small business pensions requires careful thinking industry is mushrooming recommendations put forward in to transfer the Ombudsman’s tax investigation and complaints handling tax rollover that commenced on to avoid serious consequences and these reviews. The Inspector-General complaints handling function to the functions of the Commonwealth 1 July 2016. Now, it’s time to focus on ensure all the legal and practical of Taxation plays an important role Ombudsman, improving its ability to Inspector-General of Taxation has how it may be applied to trusts issues have been considered in the independent oversight of the identify systemic issues arising from minimised duplication and created ATO. No other agency performs this individual taxpayer complaints. This signifi cant e ciencies. In summary, the role of scrutiny is to provide independent assurance that Fundamental Principles Taxpayers’ Charter ATO services are well managed and adhere to the Taxpayers’ Charter. As a taxpayer, you have the right to: And the responsibility to: The current level of scrutiny provides 1. Integrity and equality 1. Be truthful the mechanisms via which taxpayers The tax system shall be designed and administered fairly, Be truthful in all tax matters, including legally required honestly and with integrity, according to the law, without disclosures. gain trust and confi dence in the fairness bias or preference. of the tax system, which in turn feeds into high levels of voluntary compliance. 72 2. Certainty 2. Provide information The tax system will be designed and administered to Provide information on a timely basis as and when Without the current level of scrutiny, it provide, as far possible, certainty, clarity and fi nality in one’s reasonably required. would be di cult for Parliament to fulfi l tax aff airs. Clear and present danger its role of ensuring accountability of the An alarmingly small proportion of 3. Effi ciency and eff ectiveness 3. Be cooperative ATO to the Australian public. The tax system will be designed and administered fairly and Be cooperative in dealings with the tax administration, fi ling SMEs use external professionals cost-eff ectively, taking into account the attainment of its tax returns and information reporting, the conduct of an We encourage the ATO to continue purposes. audit, and payment of taxes. Technical in making key decisions and the professional way in which it deals with its scrutineers. The magnitude of accountants must become more 4. Appeal and the right to dispute resolution 4. Make payment Our technical section In cases of disputes as to tax liability, an independent, Pay tax on time without deduction or off set subject to the the ATO’s operations and the important relevant to their SME clients objective, speedy and cost-eff ective appeal process. Disputes right to appeal. as to actions of the tax authority will be followed up without role it plays amplifi es the signifi cant keeps you abreast of the fear of reprisal under independent oversight. risk that needs to be appropriately latest news and updates 5. Appropriate assistance 5. Comply with the law managed through robust governance Taxpayers who face diffi culties in carrying out their Comply with tax responsibilities and seek assistance if arrangements, including independent responsibilities as taxpayers will be given appropriate necessary. affecting the industry assistance by the tax administration. and e ective external scrutineering. Self-assessment and voluntary 6. Confi dentiality and privacy 6. Maintain records A taxpayer’s aff airs and records will be kept confi dential and Maintain accurate fi nancial records and supporting compliance is dependent on Australians private except in the case of public hearings in litigation or information for such period as may be reasonably required. having confi dence in the tax system. criminal prosecutions. Independent scrutineering is the most 7. Pay correct amount of tax 7. Take due care e ective way to safeguard against A taxpayer is required to pay no more than the amount of Exercise an appropriate degree of care and diligence in 74 tax based on tax laws. taxation matters. large-scale systemic failures and irreparable loss of confi dence in the 8. Representation 8. Retain responsibility for advisors system. The House of Representatives A taxpayer may be represented by a person of the taxpayer’s Be held accountable for the correctness and completeness of Understanding management choosing. the information supplied to the tax administration, whether Tax Committee’s inquiry into the buy-outs or not another person has been engaged to prepare, assemble external scrutiny of the ATO has now and/or submit the information on your behalf. Succession planning is one of been fi nalised. The committee has the biggest bugbears for small 9. Proportionality 9. Show courtesy agreed that no substantial changes in Enforcement action, including audits, collections, Treat tax offi cers with courtesy and respect, noting that businesses, and accountants need to external scrutiny are required. It has, reassessment, penalties and prosecutions, will be abuse of tax offi cers in performance of their duties is never be able to help out proportionate to the circumstances. acceptable. however, made some administrative

10. Honesty 10. Comply cross-border recommendations to make it clearer In the absence of any evidence to the contrary, to be Ensure that all legitimate cross-border compliance how the scrutineers co-ordinate presumed honest. requirements are met. their work.

64 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 65

P062_TonysColumn_FW.indd 64 18-Jul-16 2:43:06 PM P065_Technical_Cover)_FW.indd 65 7/21/2016 11:53:55 AM Technical | Tax Technical | Tax

test individual on their FTE will not give rise to a change in the ultimate economic ownership of the asset(s); Trusts and the transfers of asset(s) to an entity from a family trust (FT) will not give rise to a change in the ultimate economic new small business ownership of the asset(s) if the ultimate economic ownership of the transferred asset(s) is held by individuals who are in tax rollover the family group of the test individual of FT just after the transfer; and transfers of asset(s) to a family trust (FT) In the last issue, I outlined the important new from another entity will not give rise to a small business tax rollover that commenced change in the ultimate economic ownership of the asset(s) if the ultimate economic on 1 July 2016. Now, it’s time to focus on the ownership of the transferred asset(s) was rollover and how it may be applied to trusts held by individuals who are in the family group of FT just before the transfer. by George Kolliou Examples where the alternate ultimate economic ownership test will be satisfied: Family Trust A transfers CGT assets to or this article, the focus will be on the Family Trust B and both Family Trust A particular issues that relate to trusts and Family Trust B have Mr X as the test and not all the requirements that must individual on their FTE. F be satisfi ed to access the rollover. A Co Pty Ltd has 12 ordinary shares on Unlike most of the existing rollovers, the new issue. Six shares are owned by Mr X and small business tax rollover applies not only to six shares are owned by Mrs X. A Co Pty companies but extends to trusts. Given that Ltd transfers CGT assets to Family Trust trusts have been, and continue to be, used B. The test individual of the FTE made by for business structures and estate planning, Family Trust B is Mr X. the new small business tax rollover provides Family Trust C has made a FTE with Mr Y more options in restructuring clients’ a airs as the test individual. The trustee of that were previously not available. Family Trust C transfers CGT assets to a partnership between Mr Y and Mrs Y. Trust cloning George Kolliou is the principal of Legislative changes to the operation of CGT are set out in the withdrawn TR 2006/4W. Kolliou Tax Pty Ltd. He can be contacted “These requirements are, in my view, No doubt it is obvious that an at [email protected] Events E1 and E2 e ective from 31 October This ruling set out the ATO’s view on the understanding of the family group of family 2008 put an end to trust cloning. Trust meaning of the words ‘the benefi ciaries and more onerous than the conditions that trusts is critical to access the new small cloning involved the creation of a second terms of both trusts are the same’. These business tax rollover. trust that was almost identical to the fi rst requirements are, in my view, more onerous must be satisfied under the new small The family group consists of the trust. Structured correctly, a transfer of than the conditions that must be satisfi ed test individual and his/her spouse and assets from the fi rst (original) trust to the under the new small business rollover as the business rollover as the current test is no their children, grandchildren, and lineal second (cloned) trust did not give rise to CGT current test is no ‘material change’ in those descendants. It also extends to the siblings consequences. Trust cloning remained viable who benefi t in economic terms. ‘material change’ in those who benefit in of the test individual and his/her spouse and after 2008 only if the CGT liability could be Care should be taken in ‘cloning’ a the children and lineal descendants of such dealt with by using a concession such as trust as there are trust law, and not just economic terms” siblings. The spouse of any individual noted small business CGT concessions. taxation, issues that must be considered. I above is also included in the family group. Provided the benefi ciaries of the original recommend professional advice be obtained or because of doubts about whether the test imposing the penal family trust distribution tax The new small business rollover is a trust and the cloned trust are so similar that in drafting and settling the clone trust. can be satisfied, the costs of obtaining advice for distribution to beneficiaries outside the welcome tool for advisers in restricting there is ‘no practical change in the individuals may be prohibitive. In such cases, there is a family group of the test individual nominated small business clients using trusts. It fills who economically benefi t’, the rollover relief FTEs and the alternate ultimate ‘safety net’ for discretionary trusts that make in the FTE. a gap that existed for some time, but a should be available under the new small economic ownership test a family trust election (FTE). This means that: word of warning: trusts are complicated business tax rollover. Arguably this condition It is not always possible to satisfy the Despite the terms of the deed, FTEs transfers of asset(s) from one family entities and care must be taken so that will be satisfi ed if the cloning rules applying requirement that there is ‘no practical change effectively limit the range of beneficiaries who trust (FTA) to another family trust (FTB) unintended consequences do not arise from before 31 October 2008 are met. These rules in the individuals who economically benefi t’; can receive a distribution from the trust by where both FTA and FTB have the same a restructure.

66 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 67

P066_Tech_Kolliou_FW.indd 66 18-Jul-16 2:54:35 PM P066_Tech_Kolliou_FW.indd 67 18-Jul-16 2:54:43 PM Technical | Superannuation Technical | Superannuation

Structuring non-commutable reversionary pensions

Implementing non-commutable pensions requires careful thinking to avoid serious consequences and ensure all the legal and practical issues have been considered

by Rebecca James

his article considers some of the that provides that under Jaye’s will, the balance current issues associated with of the non-commutable pension will be paid structuring non-commutable pensions to a testamentary trust established under her Tthat are automatically reversionary to will for the benefit of Eric’s children. However, the member’s spouse on the member’s death. if after Eric’s death, Jaye elects to vary her will, any recourse is limited to instituting legal Case study proceedings, which are likely to be costly and Eric and his wife Jaye are considering their time-consuming. There are also no guarantees superannuation and estate planning matters. that such an action would be successful. Eric has queried whether his superannuation Further, any amount paid to Jaye’s estate interests in the Wonderfalls Fund can be is at risk of a testator family maintenance A key benefit of this strategy is the her superannuation dependants, or her each fund. Alternatively, granting a joint Rebecca James is an paid to Jaye, should he predecease her, claim, including her superannuation death certainty that Eric’s children and Jaye LPR (being the executor of her estate) in enduring power of attorney to Jaye and Eric’s experienced self-managed as a non-commutable pension, while the benefits. Where it is likely that such a claim will each receive a proportion of Eric’s accordance with the terms of the BDBN; or children may be an option, but could give rise superannuation fund lawyer, balance is paid to his two children from a may be made, it is generally not advisable to with expertise in advising superannuation death benefits. if Jaye has not made a BDBN, her to complications and disputes. previous relationship. direct superannuation benefits to be paid to accountants, financial planners, It is crucial, however, to ensure that the superannuation death benefits will be paid the estate, to avoid increasing the amount trustees and financial institutions balance of the non-commutable pension to one or more of her superannuation Option C: Other alternatives Option A: Mutual wills agreement potentially available to claimants. on superannuation and taxation is sufficient to support Jaye (actuarial dependants, or her LPR, at the The options set out above are not exhaustive. Under this option, on Jaye’s death, the balance law matters assistance may therefore be required). trustee’s discretion. There are numerous other strategies that of her superannuation death benefits, including Option B: Dual-fund structure Ideally, the terms of the pension should be can be used to effectively achieve the the non-commutable pension, are paid to her An alternative option is for Eric to establish drafted with sufficient withdrawal restrictions Thus, unless Jaye directs the trustee to desired outcome, subject to tax and other LPR, being the executor of her will, pursuant to another superannuation fund. to ensure that the pension amount permitted pay her superannuation death benefits to her considerations. We recommend obtaining legal a valid and effective BDBN. The existing fund can be used to pay a to be drawn down each year is limited to LPR and has provided for this amount to be advice before implementing arrangements of Jaye’s superannuation death benefits non-commutable pension to Jaye on Eric’s an amount required by Jaye to maintain her paid to Eric’s children under her will, they will this type. are then distributed in accordance with a death, while the new fund can be used to pay standard of living and exhaust the pension not be entitled to receive the balance of the special provision in her will requiring that her a benefit to his children directly or via Eric’s amount during her lifetime, but not dissipate superannuation death benefits. Conclusion superannuation death benefits are paid directly LPR. BDBNs should be made in respect of the pension unnecessarily (subject to paying When utilising this strategy, it is important As can be seen from the considerations set to Eric’s children, or to a testamentary trust each fund. Further, each fund should have a the statutory minimum each year). to consider succession of the control of each out above, paying a non-commutable pension for the benefit of Eric’s children. A key benefit separate corporate trustee and the necessary On Jaye’s death, the balance of the non- fund, either if Eric dies or if he loses capacity. requires a number of issues and challenges to of a testamentary trust is the added asset steps should be implemented to ensure commutable pension will form part of her While Jaye would ideally take control of Fund be worked through to successfully structure protection aspects of the arrangement. It the control of each fund passes to the right member benefits in the fund and will be dealt A and Eric’s children would take control of and implement this strategy. In particular, also allows income splitting at adult tax rates beneficiary (such as appointing successor with as follows: Fund B on Eric’s death, if Eric loses capacity the control of the fund on death or loss of for children. directors in respect of each corporate trustee). where Jaye has made a valid and it would be preferable to grant an enduring capacity is a fundamental matter that must Eric and Jaye may wish to try to ‘lock in’ this Eric’s will should also address the transfer of effective BDBN, her superannuation death power of attorney to a trusted independent be addressed with any succession planning strategy by executing a mutual wills agreement the shares in the corporate trustee. benefits will be paid to one or more of third party and have that third party control structure that is adopted.

68 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 69

P068_Tech-RebeccaJames_FW.indd 68 18-Jul-16 2:57:41 PM P068_Tech-RebeccaJames_FW.indd 69 18-Jul-16 2:57:54 PM Technical | Cyber security Technical | Cyber security

More security technologies means businesses require more security experts. And there aren’t enough ‘good’ guys to go around. Here are some interesting statistics: According to Risk Analytics, 75 per cent of Fintech and attacks spread from victim zero to victim one within 24 hours. Forty per cent of those spread within the first hour cyber security Confirmed data breaches were up 55 per cent between 2014 and 2015 (Verizon Data Breach Investigations Report) Businesses can’t aﬀ ord to neglect online security, It takes 205 days on average to detect an and the cyber security industry is mushrooming incident, and another 120 days on average to remediate the exploit

by Boaz Fischer Are we at a disadvantage or what? What is the answer? Well, according to Mr Moritz, we need to collaborate, exchange and share cyber experts. Right now, we just don’t do it well. I would also add that businesses need to start doing the basic cyber ‘hygiene’ well. he National Fintech Cyber Security Consider the Top 4 Mitigation Strategies of Summit, held in Sydney in May, the Australian Signals Directorate (ASD). featured leading fi gures from According to the ASD, at least 85 per cent T industry, government and research of the targeted cyber intrusions it responds organisations. They took the opportunity to could be prevented by following the top to advocate security collaboration and four mitigations. innovation, with the aim of increasing The question you are probably asking security awareness and opportunities, and is: what does this National Fintech Cyber raising Australia’s status as an information Security Summit mean to me? security powerhouse. For starters, if you know of a business Boaz Fischer is CEO of Two of the key questions addressed were: that aims to be creative and innovative, and CommsNet Group P/L, an author Why Australia may be primed to capitalise is looking to leverage their cyber security and Certifi ed Insider Threat on cyber security start-ups opportunity, the National Fintech Cyber The global cyber security market sits at Specialist with the Carnegie Why collaboration is the future of Security Summit could be a first step to a $71 billion annually, growing at 8 per cent “Hackers continue to innovate because Mellon University cyber security much bigger picture. Why not touch base Jobs for cyber security have grown by of the huge payout from stealing data in with organisations such as Data61 (CSIRO) As a small business, these two issues 57 per cent or Stone & Chalk. may not interest you. They may not even be Several Australian organisations, order to monetise it” Secondly, if you are a business, you eye-popping headlines. But in the long term, including the Commonwealth Bank must take security practice to another these two issues could place Australia in and Westpac, make the Global Top 100 level. It doesn’t necessarily mean huge a stronger position economically – by the companies list. Interestingly, these As a result: shortcomings in the face of cyber threats. investments in technology and experts. It’s country’s being innovative and creative in organisations demand cyber security. Expect a ten-fold increase in spending We too must invest to prevent our own about implementing basic security practices developing new cyber security solutions. Where there is opportunity, there is for cyber security, estimated at business from becoming a front-page in a consistent manner. Ransomware is Yes, we too want to join the boat and be a potential for niche, innovative security $639 billion by 2023 headline. We must also invest in our becoming prominent as a major threat to giant hub of crazy like-minded cyber security start-ups to take advantage. Threat intelligence is growing at business’ cyber defence, rather than spend all businesses. Why not ensure you have a start-ups. The benefi t of linking cyber 84 per cent CAGR in response to an incident. proper back-up system in place, as well as security to our economy and every part of IT-Harvest’s chief research analyst, The industry overall is growing at Another interesting presentation came from a tested recovery system. our business is enormous. In addition, we Richard Stiennon, then made a key point: 24 per cent CAGR Ron Moritz, founding partner of TrueBit Cyber Finally, increasing our awareness is will also benefi t from having a pool of brilliant “Where businesses focus on innovation Partners. Mr Moritz started out by saying, “We important. As businesses, we tend to keep people whom we can leverage to make our by developing faster, cheaper and better Cyber security presents a huge have become dumb. We can’t seem to stop our heads stuck in the weeds and rarely country safer. products... hackers, on the other hand, opportunity. While there is a huge opening consuming security technologies.” take time to look around. The presentation started with Australia’s continue to innovate because of the huge for the brightest creative cyber security He is right. We tend to think security is Security protection is everyone’s Chief Scientist, Dr Alan Finkel, who payout from stealing data in order to minds, we as businesses have to be solved by a shiny new silver bullet of yet business. Your business viability is addressed the potential opportunities: monetise it,” Mr Stiennon said. extremely mindful and vigilant about our another security technology. important to the whole economy.

70 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 71

P070_Tech_Fischer_FW.indd 70 7/22/2016 9:57:16 AM P070_Tech_Fischer_FW.indd 71 7/21/2016 10:02:21 AM Technical | Insolvency Technical | Insolvency

The second is that often the only financial data provided by the external accountant Clear and present danger: is historical in nature. Last year’s profit and loss statement and balance sheet provide little guidance to the business owner to accountants must make day-to-day decisions in the present. What the business owner and the accountant need to do is work together to become more relevant to ensure the business owner has the relevant information, on order, to not only make daily decisions, but also those longer term their SME clients strategic decisions. This comes down to cash flow and A recent survey has found that an alarmingly small business plans. And it comes down to the accountant and the business owner working proportion of small to medium-sized enterprises together to put in place a realistic plan – (SMEs) use external professionals, such as based on this information – to implement, monitor and adjust as they go forward. accountants, in the course of making decisions that From an insolvency practitioner infl uence the performance of their business perspective, we have seen some spectacular business failures where conceptually those businesses should have prospered by Michael Gri n out of sight and yet failed due to a deadly combination of ignorance and inept business records. In one landmark Worrells case, the company lost no less than $10 million in 12 months, and in an attempt to recover something for creditors, we spent 12 months reconstructing the accounting records. Beyond the numbers, beyond the skill, beyond the technical knowledge and tools he survey, The Voice of Australian While it is natural enough for business The survey also found that business Repeatedly in these cases, family that accountants have in their trade, at the Business, gave me pause to refl ect owners to bounce ideas o family and owners rely on their own financial data members, particularly a spouse, are involved base of the profession is the proposition on how much of an infl uence this friends, what qualifi es someone as a family in making business decisions over data in the business in a clerical function, such as of adding value and insight to a business. T attitude has on the insolvency or friend does not necessarily mean they provided by their accountants. performing the bookkeeping role. This is achieved with accountants providing administrations we see. have better insight or business acumen The obvious question is why? I have two That person is often responsible for relevant and real-time analysis of cash flow Clearly, as an insolvency practitioner, than the business owner themselves. possible answers. handling all administration tasks, while the and business performance to the business my view is that professional advice is Sure, if a family member or friend has The first is that the financial data other spouse is generating the business owners as part of monitoring an agreed and invaluable and often makes the di erence relevant qualifi cations to give such advice, available to the business owner, frequently income in their particular field of expertise. implemented business plan. Michael Gri n, a partner with between the life or death of a business. then there is nothing wrong with seeking through an internally maintained accounting The problem is, in all too many instances, If 74 per cent of SME business owners Worrells Brisbane & Northern While business owners have a responsibility their input. But if they have the appropriate package, is accessible in real time. the spouse that is charged with those office continue not to get professional advice, I Rivers, is a registered liquidator, to ensure they keep proper and current and relevant business qualifi cations, then Assuming that the information entered into responsibilities and the bookkeeping role, believe we will continue to see business o cial liquidator and registered records, it is often the case that they alone of course they are external professionals the accounting package is accurate and with all the best intentions, has little to no failures due to decisions being made without trustee in bankruptcy. He is also do not possess the necessary skills to only if those are the terms – i.e. properly current, it can provide the business owner formal training on bookkeeping. the benefit of input from accountants. a member of CAANZ and the make critical business decisions without a engaged and services paid for. Not at the with a reconciled cash at bank balance, As a result, the risk is ‘garbage in, garbage Sure, these business owners may save on Australian Restructuring Insolvency professional adviser’s input. BBQ on the weekend. information on stock, trade debtors, aged out’. I have seen instances where GST is professional accounting fees, but the risk is and Turnaround Association So, why do only 26 per cent of SMEs But if that family member or friend is trade creditors and wages. As expected, the not taken into consideration or incorrectly these businesses may fail in circumstances engage accountants, and where are the unqualifi ed, what the business owner risks business owner feels they can make day-to- calculated, where superannuation has not where, had the business owner sought other 1.5 million SMEs in Australia getting – in addition to bad advice and its impact on day decisions about the business with this been calculated properly and where wages and followed their accountant’s advice, the their advice from? the business – is the e ect on the relationship information. But the business owner should have been underpaid. And then the relevant business may have survived and prospered. In the survey, participants were asked between the business owner and those be cautioned in making longer term business government authority completes an audit Our advice to business owners is who they turn to for advice and insight friends or family, which they have relied decisions based on this information alone. and the business is suddenly faced with simple – get advice. And our wish is for in running their businesses; the common upon. In short, business owners should In addition, as we see numerous times, tens or hundreds of thousands of dollars accountants to work with us to help them, denominator in their responses was “friends, get professional advice from professional many businesses stem from a small in claims for underpayments spanning over help their client not to become another family, and online media”. advisers, and not family and friends. family business. some years. statistic in a business survey.

72 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 73

P072_Tech_Worrells_FW.indd 72 7/20/2016 10:27:31 AM P072_Tech_Worrells_FW.indd 73 7/20/2016 10:28:05 AM Technical | Management buy-outs Technical | Management buy-outs

other sale strategies. All parties know each management or owners getting cold feet or other, expectations are set early on, and seeking alternate opportunities. management familiarity reduces uncertainty Other issues that may be encountered around business viability. subsequent to the implementation of a staged Flexibility: MBOs can provide an buy-in include: opportunity to ‘stage’ a transaction, allowing Owners not being prepared to let go of existing owners to realise a liquidity event management responsibilities or control, earlier, provide a gradual sale between creating confl ict between the parties; or owners, and provide management additional The underperformance of the business Understanding time to fi nance the purchase. post-transaction, particularly in a Continuity/vendor satisfaction: Exiting staged transaction. owners often feel confi dent in the future management buy-outs of the business, and that customers and Clear communication and negotiation between employees will continue to be looked after. owners and the management team to set Succession planning is one of the biggest Opportunity: An MBO provides expectations before agreeing to terms will usually management with an opportunity to grow be able to address the above. Appropriate bugbears for small businesses, and their personal wealth and receive greater agreements, frameworks and mechanisms can accountants need to be able to help out rewards for their risks and e orts. be implemented prior to the issues arising. Funding an MBO Key steps by Matthew Swan Managers don’t need large amounts of A transaction plan and timetable are important personal capital to invest in the business. to ensure the completion and success of the Ideally, they should have an investment that is transaction. The key steps in an MBO transaction signifi cant and that incentivises them to ensure are outlined in the fi gure below: investment objectives are met. There are three main MBO funding options: Initial approach by the management team to owners (or vice versa) Vendor funding: Sourced from exiting owners directly, or from the company. There Completion of an ‘indicative’ valuation of are a number of possible structures that the business can provide fl exibility where existing owners want to pursue a staged exit. Initial negotiations regarding value and Bank funding: Depending on existing transaction structure, including consideration of the tax consequences for both parties business debt, a large portion of buy-in value may be funded via bank debt, either A review (or preparation) of the business to the company or management team, to plan and fi nancial modelling for provision to acquire equity from existing owners. external funders he prevalence of Baby Boomer goodwill tied up in the relationships of Advantages of an MBO transaction Private equity: Management partners business owners nearing retirement owners and senior management with An MBO provides the following advantages with a private equity funder. Structures can Preparation of agreements and se lement of means that succession planning has customers, or specialist know-how. The for business owners and management: vary, usually combining debt and equity the transaction been a hot discussion topic in recent position of the management team means Confi dentiality: Where there are funding, and are typically only used in larger T Conclusion years, especially considering that the value that they are often the most appropriate commercially sensitive issues, the vendor business transactions (>$5 million EBITDA). of a private SME is typically a substantial parties to acquire the business. From our may not wish to allow competitors access It is important for owners and management part of the owner’s personal wealth. experience, the following criteria must be to the business. Obstacles considering an MBO to start planning as While trade sales and initial public o erings met for a successful MBO: Speed: The MBO can be a very quick We have seen several common factors that soon as possible, particularly where a are touted as the most common exit options, an experienced and well-balanced process when all parties co-operate, prevent MBOs being completed, which include: staged transaction process is preferred. continued market uncertainty and the number management team and a competent also reducing distractions to the ongoing Valuation: Incorrect valuation advice E ective planning and communication are of opportunities for acquirers mean that replacement leader; business operations. when initially evaluating the transaction, critical in the execution of the transaction. Matthew Swan is a manager in the PKF business owners are facing challenges in a commercially sound business, on a Reduced costs: Reduced due diligence which creates a valuation gap between The key success factors are: Corporate Finance team with more than either realising appropriate values or fi nding stand-alone basis, with a history of requirements and the possibility of using owners and management that is too great a strong relationship between the MBO 10 years of experience as an accountant, suitors. Current market conditions, and in generating consistent positive cash common fi nanciers means an MBO to bridge. team and vendor; focusing on corporate fi nance and audit many cases the absence of family members fl ows, that is capable of supporting an will be cheaper than other business Funding: An inability of management to determining a fair market value for and assurance matters to pass the baton to, make a management appropriate funding structure for the MBO; sale transactions. secure necessary funding, or unwillingness the business; buy-out (MBO) a compelling option for a willing owner and management team, High probability of success: When to put some ‘skin in the game’, such as by determining the funding structure and business owners. with realistic views regarding the value of owners and management hold open and re-mortgaging the house. capital/funding partners; and The management team is a key driver the business; and constructive discussions, MBOs have a Delays: Delays in agreeing the terms and appointing experienced advisers to of a business, with much of the business’ sound growth prospects. greater chance of success compared with implementing the MBO will usually result in manage the process.

74 August / September 2016 pubacct.org.au pubacct.org.au August / September 2016 75

P074_Tech_Swan_FW.indd 74 18-Jul-16 3:12:40 PM P074_Tech_Swan_FW.indd 75 18-Jul-16 3:12:48 PM Register of members Register of members

Chen Xiao Li Gan Zeqiang Hua Jian Lam Sau Lan Li Ziyu Chen Xiaoxiong Gao Chunshan Huan Lingqin LAM Weng Ian Lian Jianhua Chen Xin Gao Cunyuan Huang Baokun Lan Tianfeng Lian Qianhua Chen Xin Hua Gao Donghui Huang Chaoyi Lau Chi Kwan Liang Jianhua Register of members Chen Xinhua Gao Genqiang Huang Chun Long Lee Mu-En Liang Jing Chen Xiongyi Gao Jie Huang Dong Lei Choi Mei Liang Jun Chen Xiuxia Gao Jin Huang Feng Leong Cheok Lai Liang Lijuan Chen Xiuya Gao Jun Huang Guangling Leong Kit In Liang Lu Chen Xuhua Gao Laijun Huang Hengcai Leong Tomas Si Hang Liang Qingwei The following list updates the Membership Register of the Institute of Public Chen Yan Gao Lingli Huang Jie Leung Cheong Yuen Liang Xiao Hong Chen Yanfang Gao Pengfei Huang Jiecong Leung Hung Sun Liang Yali Head Office Chen Yao Gao Qing Jiang Huang Li Li An Li Liao Hai Accountants. The board of directors extends congratulations to all new members Chen Yi Gao Wen Huang Lingli Li Anqi Liao Liang Level 6, 555 Lonsdale Street, Melbourne Chen Yilan Gao Yajun Huang Liping Li Bangjin Liao Mingqiang GPO Box 1637, Melbourne, VIC 3001 and to those who have advanced in status Chen Yimin Gao Yu Huang Long Li Benyou Liao Wei Chen Yuhong Ge Wenjie Huang Mei Li Bing Lin Chun Hua Phone: (03) 8665 3100 Chen Yunyu Ge Yanling Huang Min Jin Li Binlin Lin Fan Fax: (03) 8665 3130 Chen Zhibei Geng Jing Huang Mindan Li Bosheng Lin Hai Email: [email protected] Victoria South Australia Australia Capital Territory Bai Jianzhong Chen Zhicun Geng Yi Huang Minjin Li Caiqin Lin Qiusheng Admitted Shivam Arora Neil Fennell Admitted Eric Green Bai Jufang Chen Zhongfei Gong Shenggang Huang Minnan Li Chonghua Lin Wei Xiong Johnson Baby Michael France Nalaka Polgolla Bai Ling Cheng Beilei Gong Shiqi Huang Mintong Li Chongmin Lin Ying Jia Australian Capital Territory as AIPA Sathya Bistha Masoud Habibian as FIPA Bai Yao Cheng Ke Gong Xin Yi Huang Pengfei Li Chunjing Lin Yuting Analyn Caolboy Tanya Kirker China Bao Ping Cheng Ling Gong Yan Huang Pingping Li Chunmei Lin Zhi Level 1, The Realm Cheung Wai Man Gu Haohui Huang Rong Li Dawen Lin Ziyong New South Wales Janice Chua Damian McGrath Chen Feiyan Bao Wenyi 18 National Circuit, Barton ACT 2604 Cheung Wai Ming Romar Gu Jizhi Huang Rong Li Fei Ling Cuiping Mustafa Abay Kylie Dare Pranav Parikh Victoria Chen Honglei Bao Yunxia Phone: (02) 6198 3362 Henry Kong Chen Lele Barclay-Grundler Curtis Richard Chi Huan Ning Gu Minling Huang Runping Li Feilong Ling Qihu Mario Armaly Elizabeth Di Giambattista Kylie Pascoe Chen Wanying Bei Yu Chow Wai Hing Gu Qinghua Huang Shouda Li Fujun Ling Qiu Jian Fax: (02) 6198 3232 Mohammed Bhuiyan Nita Legg Hetal Patel Rosalind Mildenhall Jo-Anne Reid South Australia Chen Xiaoqing Bian Haoran Chu Pui Mei Gu Weihong Huang Tao Li Fuxin Ling Yun Julie Bojko Email: [email protected] Pas Schiavello Malcolm Szeto Chen Zhi Bian Ke Cong Tao Gu Yaodong Huang Wei Li Guoguang Liu Baiqiang Muhammed Chowdhury Li Han Melanie Wallace Queensland Dai Kang Bo Jianping Cui Haodan Gu Yu Huang Wenshan Liu Bo Peter Elder Alexander Walsh Christie Allan Western Australia Du Weihong Cai Jieying Cui Jinming Gu Zhen Yu Huang Xiaohui Li Hang Liu Bo New South Wales Michele Facchin William Zammit Errol Allan Harjeet Singh Fan Tianjun Cai Lini Cui Rui Guo Binbin Huang Xiaokun Li Hanhui Liu Chang Li Hanrui Level 10, 210 George Street, Sydney Boushra Gadallah Christopher Burnett Fang Li Cai Nana Cui Wenqi Guo Jiandong Huang Xiaoqiu Liu Chunyan Huang Xiaowen Li Henghong Mahendra Ghimire Western Australia Johannes Du Plessis Hong Kong Feligueira Eddy Cai Shouyu Cui Xiaoding Guo Jianqi Liu Dan Locked Bag A6090, Sydney South, NSW 1235 Huang Yang Li Hongjing Tracey Goodwin Jackson Barngetuny Michael Hopkins Luk Pui Chan Gao Liyu Cai Xin Cui Yuqiang Guo Jifang Liu Dongliang Huang Yaohui Li Hongmei General manager: Patricia Michel Helal Hammoud Jennifer Bunn Michael Lee Guo Yanping Cai Yue Dai Feng Guo Jing Liu Donglin Guo Jinzhen Huang Yumei Li Hui Jacqueline Harrison Domenico Calabro Ginette Muller China Hong Ye Cang Xuejuan Dai Hua Liu Fuping Phone: (02) 8262 6000 Dai Meihua Guo Lei Huang Zan Li Hui Ling Liu Hui Megan Hockey Angelica De Asis Eric Neal Gao Lanying Huang Chao Cao Aifen Fax: (02) 9283 8277 Deng Jun Guo Ning Huang Zhaobin Li Huiqi Liu Jia Wei Beatrix Horvath Zhiguang Gao Gu Bin Jiang Junjun Cao Feng Deng Minzhi Guo Su Huang Zhong Li Jiahong Liu Jianguo Email: [email protected] Hayoung Jang Western Australia Gu Yi Lee Choon Cao Liang Tanya Howe Deng Quanying Guo Wei Huang Zhonghua Li Jianqiang Liu Jianguo Tristan Jansen Lilian Dinardo Ju Jianping Li Qiancheng Cao Ming Ruth Ison Deng Wanli Guo Yanjun Huang Zi Wen Li Jie Liu Jiangyan Ryan McNally Dewi Fitrianti Ma Xianhong Liang Zhenhong Cao Qian Yi Wendy Kerrison Deng Wei Guo Yaqin Huang Ziyi Li Jin Bin Liu Jinbo Queensland Garry Perotti Susan Fortuna Miao Chunyu Lin Yueying Cao Wei Glen King Deng Yuan Fan Guo Yaxiong Huang Wei Ming Wendy Li Jing Liu Jun Anna Theron Geoffrey Ranford Pu Baigang Liu Chuanqing Cao Weikang Level 11, 300 Queen Street, Brisbane Clinton Landow Deng Yunli Guo Yixi Huo Mengqing LI Jing Liu Ke Ming Angela Reid Wang Lina Liu Suqun Cao Xiaoling GPO Box 2578, Brisbane, QLD 4001 Jose Leon de la Barra Di Kai Guo Yiyong Huo Yan Li Jing Liu Lan Overseas Wu Tingting Liu Xiao Cao Xinhua Alana Macklin Mo Fanglan Cao Xuefeng Diao Li Li Guo Zhongrui Ji Jing Li Jing Yi Liu Lei General manager: Barbara Selmer Borchard Maulik Mistry China Yao Yao Ding Hua Ha Changhong Ji Shengjun Li Jinjun Liu Meiyu Robert Mannix Bai Xuehua Zhang Hongjing Ni Yu Cao Yang Phone: (07) 3229 3983 Ding Jie Han Jianfa Ji Yuling Li Jinming Liu Mingzhen Lynne Mathias Chen Xiaoqing Zhao Liqun Qian Shuoling Cao Yanzi Qiu Bikai Ding Junsheng Han Ke Jia Ding Li Jiongmei Liu Qiong Fax: (07) 3229 8586 Therese Metlege Hua Zhigang Cao Yi Qiu Meirong Cao Zheng Ding Qixin Han Mei Jia Jihuang Li Jun Liu Qun Anne Morrissey Admitted Huang La Email: [email protected] Tan Hui Ying Carlos Amante Hermano Francisco Ding Xiaolian Han Zhexian Jia Pei Li Jun Liu Ronghui Vartkes Moskofian Pan Ping as MIPA Wang De Wei Chai Xifeng Ding Xin Hao Dacheng Jia Yufeng Li Junwang Liu Ruixiang Sossie Nahle Qin Dongliang Advanced Wang Han Chan Kam Meng Ding Yun Hao Dahong Jian Haiyi Li Li Liu Sanbao South Australia & Northern Territory Richard Ortiz Shen Wei to AIPA Wang Xiujuan Chan Man Chung Ding Zhi Rong Hao Yuehong Jiang Caiping Li Li Liu Wanlin Australian Capital Territory Song Zhiming Level 2, 422 King William Street Adelaide 5000. Rimon Philopos Xiao Jianfei Chan Man Yeuk Dong Haiqing He Jiamei Jiang Feiying Li Li Liu Xin Hesham Mohamed Xu Yingchun Rajshree Ramtuhal Xing Jinglei Chan Vai Leong Francicso Dong Jinbo He Jianzhong Jiang Huiqing Li Li Liu Xin Yu GPO Box 6368, Halifax Street, Adelaide 5000 Ahmed Rawdhan Zeng Xun China Matthew Sattout Xu Fan Chan Yan Ki Dong Liang He Jun Jiang Jian Ping Li Li Bin Liu Xiuke Rick Wilson Zheng Yu Jiang Yong General manager: Paul Zenkteler Nancy Schilder Xue Yue Chang Tan Iong Dong Peiqi He Jun Jiang Lei Li Lin Liu Xuan Zhou Jie Qu Xiaohui Arunasalam Sivathondan Yang Zehong Chau Winghung(Anthony) Dong Ping He Kai Jiang Minxia Li Linzhu Liu Yan Phone: (08) 8227 2255 New South Wales Zhu Pengfei Daniel Taylor Yu Han Che Xiaoning Dong Yanshuang He Lihua Jiang Ping Li Liwei Liu Yili Fax: (08) 8227 1211 Bryce Allomes Zhu Yulai Rebecca Thompson Yuan Bo Chen Bin Dong Zhuxiu He Meiqin Jiang Ronghui Li Mandun Liu Yuting Liam Bailey He Ping Jiang Sainan Liu Yuxuan Email: [email protected] Qing Wang Advanced Zeng Jianghong Chen Cai Ying Dong Zongbo Li Miao Somporn Chongprasith Hong Kong Du Jianbo He Shuqin Jiang Wen Song Li Minhui Liu Yuzhong Janene Ward Zeng Jing Fang Chen Caiyun Ashif Keshwani Kwok Tung Chan Du Jianqing He Ting Jiang Xiaolin Li Ping Liu Zhanglun Jun Yang to MIPA Zeng Li Juan Chen Chuan Tasmania Lorraine Kitchen Pik Keung Chan Zhang Lihe Chen Fei Du Keyu He Wenyu Jiang Xiaoyan Li Qingfeng Long Haiyan Bashir Ziadeh Andrew Kwon Yau Ting Ronald Chan Zhang Yufeng Chen Fengju Du Wenlai He Xiaofeng Jiang Yongqing Li Qiping Long Mao Jie 50 Letitia Street, North Hobart Rosalyn Lapsley Yee No Chan New South Wales Zhao Qiong Chen Guo Gao Du Xiaoqiang He Xiaoyong Jiao Shujie Li Rui Lu Aijun Kurtis Alaeddin GPO Box 244, Hobart, TAS 7001 Australian Capital Territory Jacqueline Masterson Ue Ting Cheng Zhou Ting Chen Hai Jian Du Yongning He Xintian Jin Fei Li Rui Lu Dao Qiang Manel Darwiche Hairul Lutfi Bassam Qaqish Wing Yan Ma Zhu Xiang Chen Hui Duan Chunhui He Yichi Jin Hongxia Li Sanlin Lu Guohui General manager: Jon Burns Abin Pyakurel Franco Salinas Yuk Ling Ng Darren French Zhu Xiongwei Chen Hui Duan Duanzhen He Yingjie Jin Lin Li Shenghua Lu Hai Dong Phone: (03) 6235 0600 Mirwais Syed Wai Man Siu Joanne Glover Fan Chunjuan Ho Hon Chung Jin Shaohong Lu Haifeng Simon Spriggs Chen Jia Li Shixun Fax: (03) 6231 6076 Ricky Turner Man Ho Wong Van Le Chen Jian Fang Fan Fangying Ho Kuan Weng Jin Taiyu Li Shuming Lu Jinhua Helen Ramsey Queensland Kathryn Vial Ching Renee Wu Chen Jianfeng Fan Maohai Ho Pak On Jin Xuefeng Li Suxia Lu Liu Email: [email protected] Rishikesh Sapkota Hardik Bhanushali Timothy Yuen Advanced Chen Jianguo Fan Rong Ho Tak Iong Jin Yan Li Wenjie Lu Mingjuan Joseph Zaccheo Malaysia Joseph Sassine Hou Jianwei Jin Ying Lu Qingyun Leonne Boyd-Skinner Chen Jinbiao Fan Ye Li Wenli Fook Lim Koh Pratap Shrestha to FIPA Fan Yonghong Hou Nina Jin Zenglin Li Xiang Lu Xiaolan Victoria Rebecca Dow Chen Jing Victoria Andrew Lye Susan Spoljaric Fan Yuefei Hou Xiaojing Jing Shengyun Li Xianghui Lu Yi Sheng Lisa Ellis Chen Jun Level 6, 555 Lonsdale Street, Melbourne Aniqa Ahmer Malek Zeitouneh Chen Junhao Fan Zonghua Hou Xuejian Jing Yujuan Li Xiangyang Lu Yimin Justine Griffiths GPO Box 1637, Melbourne, VIC 3001 Mohammad Alam Overseas New South Wales Chen Le Fang Chunhui Hou Xuhong Jong Chung Yin Li Xin Lu Yuying Joshua Guest Raymond Clark Javed Akhtar Victoria Kim Ly Chen Liangyong Fang Hai Qing Hu Chuanjiang Ju Li Li Xin Lu Zhaoxia General manager: Jon Burns Georgina Ilett Neil McLean Hu Chunhua Ju Ming David Dwyer Syed Ahmed Ali Douglas McCarron Chen Ling Fang Hua Li Xing Lu Zhuqing Phone: (03) 8665 3150 Sean McLaren Catherine Floros Muhammad Aziz Chen Liying Fang Laijie Hu Dingbo Kam Lai Kuan Li Xinghu Luo Bingtong Chanelle Michael Angela Hose Shiraz Butt Queensland Victoria Chen Liying Fang Xiaobing Hu Jian Kang Kee Chuan Li Xinhang Luo Cong Fax: (03) 8665 3151 Maritza Paola Ortega Zambrano Radha Kandasamy Mohamed Zakaria Abd Gad el hak Andrew Bailo Jack Salem Chen Liyong Fang Yan Hu Jianjun Kang Xuemin Li Xinjuan Luo Guihai Email: [email protected] Laura Ruiz Pinto Flavia Leser Zainab Gobir Newman Borg Chen Meiping Fang Yinfeng Hu Ke Ke Huaijun Li Xiumin Luo Jiefeng Phillip Sayce Sangeerni Mahalinga Iyer Rameez Indikar Khaja Alena Hendzia Queensland Chen Ming Feng Jianghua Hu Minfang Kom Kwok Yi Li Yamin Luo Meng Abu Sayeed Francis Maybir Tahir Iqbal Wendy Lane Regis Amalraj Chen Peng Feng Junmin Hu Ping Yan Kong Hongmei Li Yan Luo Xiao Li Western Australia Hu Qianxia Kong Jianbo Luo Xiuzhao Shayle Schirmer Shane McKenna Ilyas Ahmad Farooqi Khawaja Adam Mills Steven Dangaard Chen Quanwu Feng Kuncong Li Yi Feng Lingli Hu Shouhe Kong Jianwei Li Yong Luo Yingxia Level 4, 1008 Hay Street Perth WA 6000 Thi Bich Nga Vo Ha Hai Chau Nguyen Oladapo Lawal Cameron Woods Chen Rui Siamak Nosrati Nabeel Naz Feng Qiyuan Hu Shujun Kong Xiangbin Li Yonghai Luo Zhi Fen Meiling Yang South Australia Chen Ruihua PO Box 7309, Cloisters Square WA 6850 Kim Pham Seema P S South Australia Kym Pedler Chen Siyun Feng Yuan Hu Tingting Kong Xiao Jun Li Yongru Lv Wenliang General manager: Kerrin Simmonds Melanie Pisani Ahmed Paruk Katrina Fong Lim Karina Ramke Chen Suirong Feng Yuebin Hu Wenshu Kou Lili Li Yu LV Xiayin South Australia Tina Rick Dang Pham Jay Gandhi Chen Tiehong Feng Zhonglin Hu Xiaojun Kuang Renhui Li Yuanzong Lv Zhenwei Phone: (08) 9474 1755 Jakhongir Kurbanov Jonathan Sanders Huma Shadan Kwun Kuen Kan Western Australia Chen Weixing Fu Guo Qing Hu Xiyue Kuo Yinhsi Li Yubo Ma Chun An Fax: (08) 9474 2911 Yulia Petrenko Michelle Sing Muhammad Shahzad Ajay Thaper Deon Robbetze Chen Wu Fu Hongbi Hu Yan Kwok Ho Yin Perry Li Yunxian Ma Hongmin Jacqueline Radovanovic Milena Spur Muhammad Salman Siddiqui Chen Xi Fu Jian Hu Yanhua Lai Chen Li Zhanhui Ma Hongming Email: [email protected] Dion Stanbury Roza Thomas Rizwan Ahmad Siddiqui Western Australia China Chen Xi Wen Fu 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Chen Xiao publicaccountants.org.au Kaleem Ulah Kwai Keng Wong Faisal Zia Kerry Radcliffe An Hongxia Chen Xiaochun Gan Wenwen Hu Zhong Rui Ryan Lam Lok Wing Benny Li Zhuo Ma Lan Freecall 1800 625 625

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P076_Register_FW.indd 76 7/19/2016 10:35:03 AM P076_Register_FW.indd 77 7/19/2016 10:35:35 AM Register of members Business directory

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[email protected] Qu Xitong Tang Rongxun Wang Yihong Xu Guirong You Rongde Zhang Zhen Zhen Zhuang Wei ph: 03 9481 6468 Suite 207B, 434 St Kilda Road, Melbourne 3004 Rao Ting Tang Shuping Wang Yihuai Xu Guisong You Weidi Zhang Zhencong Zhuang Weijun e: simon.watkins@ www.suretyvaluations.com.au www.stptax.com Ren Dongdong Tang Xuan Wang Yisheng Xu Haizhou Yu Chunyun Zhang Zhi Zhuang Yu grayandgray.com.au CALL 07 3891 9669 Ren Xinzhou Tang Yi Wang Yongjun Xu Hongfang Yu Feng Zhang Zhihang Zou Haiyan [email protected] SMSF Audit Text Business Directory AdWe doDec-Jan.pdf not provide taxation or 1 compliance 6/11/2015 services 4:58:30 PM Ren Yawei Tang Yue Wang Yu Xu Hongmei Yu Guoqiang Zhang Zhijun Zou Hua Tel (08) 9337 4440 Ruan Hong Tao Hong Wang Yuxia Xu Jianya Yu Hua Zhang Zhiwei Zou Jing *some conditions apply Ruan Yuan Tao Shanxiang Wang Zhao Xu Jingyi Yu Huajun Zhang Zhuhua Zou Lijun Rui Dongbao Tao Weiguo Wang Zhigang Xu Li Yu Jianguo Zhao Chen Zou Wenjing Rui Hongjia Tao Yong Wang Zhikai Xu Lina Yu Jing Zhao Cunfang Zou Ying Registered independent SMSF Auditor Sha Daolin Tao Yong Wang Zhiyi Xu Liu Yu Lei Zhao Endong Zuo Beiping SKS Accounting & Business Pty Ltd • Independent Sha Feng Teng Meng Wang Zi Xu Ming Yu Qingli Zhao Haiyang SMSF AUDITS Specialising only in SMSF Audits ASIC Registered SMSF Auditor • Specialising in SMSF Audits Shan Xiangchao Tian Lei Wei Haiping Xu Qiong Yu Qingmei Zhao Hua Deceased Fixed fee/Australia Wide/Fast • Australia Wide Shang Liyun Tian Yan Wei June Xu Rongyan Yu Veng Hei Pedro Zhao Jianrong The board of directors notes, Registered SMSF Audits turnaround Wei Junsong with regret, the passing of the • Fast Turnaround Shao Beining Tian Ying Xu Shuangjuan Yu Ying Zhao Jingjun Call Saroj Adhikari MACC, RG146, SMSF SMSF AUDITS Shao Xunbing Tian Zeyu Wei ShaoJuan Xu Weifeng Yu Zhou Zhao Jun following members: Over 25 years’ experience SMSF Accounting & Tax / Audits • Over 15yrs experience Shao Zhiyong Tong Jia Qian Wei Shouxiang Xu Wen Yu Zuliang Zhao Ligeng Donald Setchell, FIPA, Auditor, MIPA, JP on 0406 400 804 or 02 Reliable service / Competitive prices She Yabei Tong Lili Wei Shuiying Xu Wenjie Yuan Feng Zhao Lihui New South Wales 8540 3915 Fast turnaround time / Australia wide Shen Dongmei TSE Po Yuen Wei Yukang Xu Wenjun Yuan Jianjun Zhao Lijiang Lynette Hale, MIPA, contact Michael E:[email protected] Ph 0407 370 763 Shen Hao Tu Yu An Wen Huiming Xu Xiaoping Yuan Jiaxiu Zhao Lili New South Wales Tel (08) 8336 2621 Email: [email protected] Shen Jianjun Ung Wai Tou Wilson WEN Qiu Rong Xu Xuming Yuan Ling Li Zhao Mingfeng Paul Turner, MIPA, M: 0497 479 543 0419 609 801 / [email protected] KEY 2 SUPER AUDITS Shen Jianzhong Vong Van Keong Wen Xuan Xu Ye Yuan Xiaoqing Zhao Ruiping New South Wales

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Disciplinary Tribunal findings The following details the most recent findings of the IPA Board Disciplinary Tribunal. The board of directors would like to stress the importance of ethical behaviour for all IPA members.

IPA Disciplinary Tribunal findings 18 March 2016

Yu Seok Suh FIPA to correspondence from The Tribunal further resolved that Details of two other cases The IPA Board Disciplinary the investigations officer Mr Suh’s membership of the IPA is presented at the Tribunal Tribunal of 18 March 2016 and provide information as suspended until the member has of 18 March 2016 can be determined that the following requested; and met the improvements specified found in the complete listing case presented against the d. Breached clause 98(2)(f) of the in the Public Practice Quality of Tribunal findings on the member was proven: IPA Constitution as the member Assurance Systems Improvement IPA website (http://www. a. Breached clause 98(2)(a) has engaged in conduct which Notice and demonstrated publicaccountants.org. of the IPA Constitution as is not in the best interests of current Continuing Professional au/about-us/complaint- the member breached the the IPA. The above constitutes Education compliance; and costs investigation-member- IPA By-Laws, in particular conduct that is not in the best of $500.00 plus GST and a fine of disciplinary-action/disciplinary- clause 9.1.9. The member interests of the IPA. $500.00 are imposed. tribunal-decisions). holds an IPA certificate of public practice but failed to comply with the IPA’s quality assurance requirements and undertake actions arising from the quality assurance review as requested; b. Breached clause 98(2) (a) of the IPA Constitution as the member breached the IPA By-Laws, in particular clause 7.1.6 which constitutes a breach of clause 98(2)(h) of the IPA Constitution. The member failed to comply with a reasonable request made by an officer of the Institute as the member failed to respond to correspondence from the investigations officer and provide information as requested; c. Breached clause 98(2)(h) of the IPA Constitution as the member failed to comply with a reasonable request made by an officer of the IPA. The member failed to respond

80 August / September 2016 pubacct.org.au

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