Skip to main content Skip to search

Posts by kingston

Individual tax return

Individual Tax Return

What is an individual tax return?

Every year, individuals are required to declare their income in a tax return. For most people, much of this information is provided to the Australian Tax Office by their employers and related financial institutions, but there are some details which must be recorded manually.

When completing an individual tax return, you will need to ensure that the information listed is complete and accurate, regardless of whether or not it has been pre-filled by an employer.

There are some specific types of income which must be declared each year.

Employment Income

This is money which you have received as a result of your engagement in paid work. Regardless of how many jobs you have, and whether they are part-time, full-time, or casual, you need to ensure that all of your combined employment income is listed on your tax return each year.

Wages and salary

This is the most common type of employment income, and probably constitutes the bulk of your earnings gained through paid employment. For tax purposes, wages and salary includes:
• Your regular pay, whether it is monthly, fortnightly, weekly, etc.
• Bonuses
• Commissions
• Parental leave pay
• Money earned for casual or part-time work
• Payments from
– An accident or illness insurance policy
– Income protection policies
– Workers compensation schemes

Allowances and other income

You might be receiving other payments in the course of your employment, including:
– Jury attendance fees
– Gratuities, tips, and payments for your services
– Payments for voluntary services, including consultation fees
– Allowances for expenses, including travel, car, clothing, laundry etc.

Some allowances, namely those for travel or overtime meals paid under an industrial award, agreement, or law, do not have to be included on a tax return so long as they meet ALL of the following requirements:
– It does not exceed the reasonable allowance amount set by the Commissioner.
– You spent the entire amount on tax-deductible expenses.
– The payment was not shown on your payment summary.

Lump sum payments

Commonly, there are two types of lump sum payments. If you leave a job, you may receive a lump sum payment which meets the value of unused long service or annual leave. Or, you may receive a lump sum payment in arrears, for money which your employer owes you from an earlier income year.

Both types of lump sum payments must be assessed and reported in the year which you receive them.

Super contributions and reportable fringe benefits

Other income related to your employment, such as fringe benefits and super contributions, must be reported so that the government can work out if you are eligible to receive tax offsets or other government benefits. You do not have to pay tax on these items.

Reportable fringe benefits are things given to you by your employer, such as a cheap loan, free health insurance, or a car which you can use for private purposes.

Reportable super contributions are those made by your employer on your behalf.

Government Payments, Annuities, and Super Pensions

If you received income from pensions paid to you as part of a super income stream, government payments, or annuities, you must declare them in your tax return.

Pensions

For tax purposes, a pension includes regular payments made as part of a super income stream. This does not include government pensions like the age pension.
Generally, these pensions are payed out by:
– Australian super funds, retirement savings account (RSA) providers, or life insurance companies
– Funds established for the benefit of state, territory, or Commonwealth employees and their dependents. For example, the Public Sector Superannuation Scheme and the Commonwealth Superannuation Scheme
– Parties as a result of the death of another person, such as the death benefit income stream

What you need to declare

Super income stream payments are made up of different components. The following components need to be included as part of your tax return:
– Any part of your benefit on which tax has already been paid by the fund, these are known as taxed elements
– Any untaxed elements, which are the parts of your benefit still taxable

Some components may be tax free. You do not need to include tax free components on your tax return.

Annuities

For tax purposes, an annuity is generally described as a regular series of payments made to you by a life insurance provider in exchange for a lump sum payment. Usually, annuities are made up of both tax free and taxable components.

Government payments

When preparing your tax return, you are required to declare payments made to you by the Government – including the age pension, Austudy, youth allowance, Newstart, and carer payments.

Some types of government payment are exempt from income tax, but must still be declared on your tax return. This information will then be used to determine your eligibility for various government benefits or tax offsets.

Payments exempt from income tax include:
– Carer adjustment payments
– Child disability allowance
– Veterans’ Affairs disability allowances and pensions
– Disability support pension (if you are below the pension age)

Investment income

Generally, you must declare investment income regardless of whether it is paid to you directly or made through distributions from a partnership such as a trust or share club.

Interest

As an Australian resident, you must declare interest as income if you are receiving it. Income from interest includes:
– Interest credited or paid to you by the ATO
– Interest earned from accounts held with financial institutions
– Interest earned from a child’s savings account if you operated or opened an account for a child and any funds in the account legally belong to you
– Interest from foreign sources (although you may be entitled to a tax offset for tax paid on this income)
– Life insurance bonuses (though you may be entitled to receive an offset equal to thirty percent of bonus amounts included as part of your income).

Dividends

Dividends can be paid to you in the form of money or property, including shares. If you are credited or paid with shares, whichever company issues you the shares is required to provide you with a statement indicating if the shares qualify as dividends.

Usually, dividend income is paid from:
– Listed investment companies
– Corporate unit trusts
– Public trading trusts
– Corporate limited partnerships (as a distribution)

Some dividends have a franking credit, or imputation attached – this must also be declared on your tax return. If you have been paid any dividends which have been franked, you’ll usually receive a franking tax offset.

Rent

Any rent-related payments you receive or become entitled to must be declared in full on your tax return.

Examples of rent-related payments can include:
– Booking or letting fees
– Rental bond money if you are entitled to retain it should a tenant default on rent or damage your rental property
– Insurance payouts made in compensation for lost rent
– Recoupment or reimbursement made for deductible expenditure

If you are receiving goods or services instead of money for rent purposes, you must declare the monetary value of these goods or services.

Co-ownership

If you own a property jointly with another person or persons, or if you have an interest in a partnership which relates to a rental property business, you must include your share of expenses and rent on your tax return.

Managed investment trusts

If you receive any credits or income from a trust investment, you must show these on your tax return.

Examples include income or credits paid from a:
– Unit trust
– Cash management trust
– Managed fund, such as a share trust, equity trust, imputation trust, balanced trust, growth trust, property trust etc
– Mortgage trust
– Money market trust

Capital gains

For tax purposes, a capital gain is any difference between the cost of an asset and the amount of income you received from it. Capital gains can also be received from managed funds or unit trusts, who may distribute capital gains to you. Capital gains are to be treated as part of your total income, and are not taxed separately.

Partnership, Business, and Trust Income

If you operate a business, you must declare its net income on your tax return.

Income received by you as an individual running a business

You must report any income earned from your business on your tax return. A separate tax return for your business is not required. Your own tax return can include a business schedule for reporting your business income.

Partnership income

Business partnerships don’t pay tax on their income, but they must lodge a partnership tax return which declares all deductible expenses and income earned. This must show how net income or loss has been shared between the partners.

Each partner is required to declare their share of the partnership’s net income or loss on their own tax return, even if they have not received any income yet.

Each partner owns a proportion of any capital gains made by the partnership. Capital gains are attributed to individual partners, and not the partnership itself for tax purposes.

Trust income

Trustees are required to lodge a tax return for any trusts they are involved in. Like partnerships, trusts are not regarded as separate taxable entities.

Trust beneficiaries must declare the amount of trust income that they are entitled to as part of their personal tax return. Even if a beneficiary has not actually received income, they must report their stake in the trust.

The only exception to this is that trust distributions do not need to be declared if family trust distribution tax has been paid already.

Foreign Income

As an Australian resident, you will be taxed for your global income. This means that you are required to declare foreign income on your Australian tax return.
Foreign income usually includes:
– Foreign employment income
– Foreign annuities and pensions
– Foreign investment income
– Capital gains made on overseas assets
– Foreign business income

Your foreign income may also be taxed in the country of origin, so it could be subject to double taxation. Australia has a system of exemptions and a credit designed to overcome this, and has obtained tax agreements with more than 40 countries.

If you are not an Australian resident, you will only be taxed on your income which originates in Australia. So you usually won’t have to declare foreign income on your tax return.

Crowdfunding

An increasingly popular means of fund raising, crowdfunding involves the use of social media and other internet services to raise funds for a venture or project. Crowdfunding arrangements are subject to rapidly reviewed and updated taxation regulations owing to its recent popularity and rapid growth.

For tax purposes, you must determine if any money received from crowdfunding is income or subject to GST. If it counts as income, it must be reported on your tax return.

Other Income

Insurance payments and compensation for lost wages or salary
You are required to declare any amount received for lost wages or salary under an income protection policy, or accident or illness insurance policy/workers compensation scheme.

If you have made a claim of personal injury, and have agreed on a settlement or had a court rule in your favour, you may be compensated in the form of periodic payments or a lump sum. These payments are tax-fee, so long as some conditions are met.

Rights to shares or discounted shares under employee share schemes
If you are a participant in an employee share scheme (ESS) and receive discounted shares, you are required to declare this discount when you lodge your tax return.

Your discount will be evaluated based on the type of scheme you are involved in as well as personal circumstances.

Awards and prizes
You may have won a lottery or prize draw run by an investment body. If you have, you must declare the value of any prize or benefits on your tax return. Prizes might include low-interest loans, cars, holidays, or cash.

Prizes won in ordinary lotteries, such as raffles and lotto draws, do not need to be declared on your tax return.
Game show contestants are only required to declare prizes won if they regularly receive fees for appearances.

If you happen to dispose of or sell an asset that was acquired through winning a lottery, you may have made a capital gain. Any capital gains must be declared on your tax return.

Contact Kingston & Knight Accountants today for your individual tax return on (03) 9863 9779 or email us on admin@kingstonknight.com.au.

kingstonknight-individual-tax-return

Read more

Forensic Accounting

Forensic Accounting

Kingston & Knight provides expert knowledge, investigation and assistance to help you protect yourself, your business and your finances from fraudulent or illegal activities.

Forensic accounting is the speciality practice area of accountancy that describes engagements that result from actual or anticipated disputes or litigation. “Forensic” means “suitable for use in a court of law”, and it is to that standard and potential outcome that our forensic accountants strive to work. If you suspect, or foresee a need for our investigative services, enquire now.

Our range of expert forensic services include:
  • Economic damages calculations, whether suffered through tort or breach of contract
  • Post-acquisition disputes such as earnouts or breaches of warranties
  • Bankruptcy, insolvency, and reorganization
  • Securities fraud
  • Business valuation
  • Computer forensics/e-discovery.

If you require Forensic Accountants Melbourne services contact Kingston & Knight today on (03) 9863 9779 or email us on admin@kingstonknight.com.au.

kingstonknight-forensic-accounting

Read more

Forensic Accountant role – Melbourne

Forensic Accountant role – Melbourne

What Does a Forensic Accountant Do?

A forensic accountant sees the oft-neglected overlap between law and finance, and translates this connection into clear and meaningful advice or assistance for their client.

This advice and/or assistance manifests itself in a number of manners including, but certainly not limited to:

Lawyer support (litigation support) – are regularly retained by lawyers. Rather than simply considering a typical accountant, even one that specializes in the financial issue at dispute, a lawyer will go to a forensic accountant for their ability to translate financial data into information relevant to the courtroom.

Corporate Investigation – A corporate entity will often retain a forensic accountant for the purpose of an internal investigation into, for example, embezzlement. Whilst a typical accountant could easily be retained to consider financial reports and files they don’t specialise in the investigation of dubious financial indicators.

Calculation of Damages – After a case has been tried, a forensic accountant may be retained to advise on the degree and nature of just and appropriate damages. Whilst an arbitrator might be valuable in their judgment of what is fair, they usually do not have the relevant depth of financial knowledge to apply this fair judgment to damages calculation. A typical accountant may have knowledge of finance and accounts, but this knowledge might not extend to the application of a fair legal outcome.

The “Middle Section”
A helpful way to think of the forensic accountant’s role is to picture a ven diagram, in which two separate circles overlap to create a middle section – these two circles are ‘Law’ and ‘Finance’. A client facing a financial-legal dispute may wish to hire a lawyer and a typical accountant to deal respectively with the ‘Law’ and ‘Finance’ circles, but a lawyer and an accountant might miss the crucial overlap between their two fields – the “middle section” – a lawyer will simply consider the law, and an accountant will consider finance. This is where the forensic accountant comes in, they sit within the crucial overlap between law and finance, at the intersection between these two fields, constantly bringing them together and translating them into each other. In this way, they may see what those in other vocations cannot, allowing them to investigate and discover key gaps or data points in present or pending litigation.

Investigative Accountants Melbourne

The forensic accountant’s unique ability to investigate the intersection between finance and law is one of the primary reasons for their regular employment, and is certainly essential to bear in mind when considering whether to retain one.

As professional investigators, forensic accountants have honed skills in recognizing suspicious financial data points or gaps in information. This is not solely accounted for by their in-depth knowledge of finance and accounts, but can be attributed to a skill set that necessarily develops from their familiarity with dubious financial undertakings. Often, the forensic accountant’s investigate ability becomes almost intuitive in its accuracy and recognition.

When approaching an investigation, though, forensic accountants do have more to rely on than their experience and familiarity with these financial ecosystems. They are also adept at using software and complex electronic networks that allow them to efficiently discover pieces of information relevant to the requirements any given case or retainer.

Contact Kingston & Knights today for Melbourne’s most trusted and professional Forensic Accountant, Litigation Support Accountant and Investigative Accountant on (03) 9863 9779 or email us on admin@kingstonknight.com.au.

kingstonknight-forensic-accountant-role-melbourne

Read more

Forensic Accountant

Forensic Accountant Melbourne

 

What is Forensic Accounting?

Forensic accounting, sometimes referred to as financial forensics, is a specialty best understood when broken up into its components: “forensic” and “accounting”. “Forensic”, in this instance, means “suitable to a court of law”. That is, it is a process suitable to the requirements of a legal procedure in terms of both analysis and depth. “Accounting” refers to a broad body of knowledge concerned with – among other things – recording and keeping financial transactions and accounts. Forensic accounting, then, is a field in accounting that examines and considers financial information for the primary purpose of legal investigation.

Because forensic accountants regularly engage in in-depth investigation and analysis, this is a field that values attention to detail. As part of our role, forensic accountants must consider detailed financial information and translate this information into comprehensive reports or presentations. These reports may then be used in a court of law to support trial evidence, for instance, or to advise a private individual in advance of a legal dispute. It is this detailed nature of Kingston Knights Forensic Accountant Melbourne’s work, as well as our keen ability to ascertain substance over form, that makes us so crucial in the resolution of financial concerns or disputes.

Consulting a Forensic Accountant

Since the GFC, the role of forensic accounting has gained increasing significance for the global financial stage. With a greater awareness of dubious financial undertakings, businesses and individuals are turning to the courts for fiscal security. Relevant civil and criminal court proceedings might use forensic accountants to provide insight into such things as:

– Fraud
– Bankruptcy
– Insolvency
– Calculation of damages
– Breaches of warranties

The role of the Forensic Accountant Melbourne, however, isn’t limited to the courts. Clients may seek advice from a forensic accountant before making the decision as to whether civil or criminal action is necessary or even warranted. As these are important legal decisions, a forensic accountant may be called upon to ensure accuracy and certainty in advance of legal disputes.

Who Consults a Forensic Accountant Melbourne?

Here are some examples of those who often retain our forensic accounting services:

– Private individuals
– Businesses and corporate entities
– Lawyers
– Banks
– Government departments or organizations
– Company shareholders

The clientele for forensic accounting is as broad as the role itself. Extending in and out of court, the legal and financial acumen of a forensic accountant may be called upon by those in a range of positions or vocations. Forensic accountants may be retained by members of the legal community for authoritative support in a court investigation, or by an individual in pursuit of secure financial advice prior to potential legal proceedings.

Specialisations

Here are some examples of these specialisations:

– Economic damages calculation
– Business valuation
– Bankruptcy
– Insolvency
– Post-acquisition disputes
– Tax or securities fraud
– Money laundering
– Claims (insurance or personal injury)

Our specialised approach to forensic accounting allows for a more detailed engagement with each enquiry.

If you require the services of an expert Forensic Accountant Melbourne, contact Kingston & Knight today (03) 9863 9779 or email us on admin@kingstonknight.com.au.

kingstonknight-forensic-accountant

Read more

Financial report audit

Financial report audit

Planning financial report

Understanding the business
When conducting an SMSF audit, the auditor should obtain a basic understanding of the SMSF which includes the:

• Nature of its administration and investments;
• Trust structure
• Parties involved in the trusteeship and management of the SMSF; and
• Related parties of the members and trustees.

Gaining this preliminary understanding of the SMSF will allow the auditor to review the trust deed and verify whether:

• The trust deed was executed properly.
• The SMSF was established with a individual trustees, a corporate trustee, or to pay a pension.
• The SMSF has current trustees who are appropriately empowered.
• The SMSF’s trust deed complies with the SISR and SISA and any changes to these.
• The powers to pay benefits and accept contributions in the form permitted by the SISR and SISA.

SMSFs are usually small entities, whose members are related and control is managed by only a few individuals at most. There is often little opportunity to implement adequate segregation of duties under these circumstances. As a result, the auditor can assess an SMSF’s compliance framework and control environment as ineffective. In this case, the auditor will not be able to rely on internal controls as an effective means of reducing substantive testing.

In response to these conditions, an auditor may be required to design and implement further audit procedures which are entirely or primarily substantive procedures.
In order to comply with ASA 250, an SMSF auditor is required to consider whether the fund has committed any previous breaches of the SISR or SISA, and whether there are any unresolved issues with the ATO (including outstanding correspondence). Any matters identified as such will have an impact on the auditor’s assessment of the compliance framework, as well as the overall risk assessment.
Services organisations may be used to provide investment management services and other services to SMSFs.

Such services may relate to:

• Custody.
• Property management.
• Asset management (including Private Equity and Hedge fund management).
• Registry.
• Investment administration, including fund administration/fund accounting.
• Superannuation member administration.

Should this be the case, the auditor will need to assess the impact of these services on identified risks.

Identification of risk

There are several major areas of risk which must be considered when auditing an SMSF, including:
• Contributions (ensuring that they have been correctly calculated, possess the correct preservation status, are allocated to members during the appropriate period and are treated correctly in regards to tax purposes);
• Investments (ensuring that they exist and are valued correctly, as well as being appropriately timed, represented, and owned);
• Benefits (ensuring that the calculation of amounts paid is correct and in accordance with the trust deed in order to ensure that no unrecorded benefits are payable);
• Revenue (ensuring that revenue is being properly accounted in accordance with accounting policies).

Communication with third parties

Auditors may be required to communicate with a number of third parties in order to understand the business and obtain sufficient audit evidence. These third parties may include fund administrators, actuaries, and investment managers. The timing of this communication should be coordinated so that all background information can be assessed before the nature, timing, and extent of audit procedures are to be determined. At the year’s end, information such as confirmation of investments will be required.

Planning memorandum

There are several specific SMSF details which should also be documented in audit plans. Responses to identified risks may depend on the following factors:

• The complexity and size of the SMSF.
• Whether the SMSF was a complying fund in previous years.
• Whether the SMSF is an accumulation fund or a defined benefit fund.
• The level of trustee knowledge and involvement in the SMSF’s operations.
• Whether or not the SMSF is self-administered or administered by a service organisation.
• The range and nature of investments held by the SMSF and whether they are managed internally or externally.
• Whether or not service auditor’s reports are available for services provided by third-party service organisations.
• Whether or not the employer-sponsor is also a client of the auditor or the firm hired to prepare the accounts.
• The potential for compliance issues, and the confirmation of any previous compliance issues.
• The due date for lodgement with the ATO of the SMSF’s Annual Return.

Audit plans require annual review to ensure that they are updated to reflect current circumstances relating to the SMSF and any changes in legislation which could affect the SMSF.

Reporting

Financial information to be prepared/basis for preparation
Many SMSFs are required to prepare an operating statement and a statement of financial position.
It is recommended that this statement be included by a trustee, though this is not mandatory. There are minimum mandatory financial statement disclosure requirements (APES 205):
• A statement of specific purpose which financial statements have been prepared for;
• A statement detailing that financial statements are special purposes statements;
• A statement of the accounting policies used in the preparation and presentation of the financial statements.

If you require a Self Managed Super fund SMSF auditor and/or SMSF Accountant contact Kingston & Knight today on (03) 9863 9779 or email us at admin@kingstonknight.com.au.

kingstonknight-financial-report-audit

Read more

COMPILATIONS AND REVIEWS OF FINANCIAL STATEMENTS

Compilations and Reviews of Financial Statements

Where an audit may not be necessary, Kingston & Knight Accountants can assist you by performing a review of your financial statements and providing a limited form of assurance as to whether any material modifications should be made to those financial statements for them to be presented in accordance with Generally Accepted Accounting Principles (G.A.A.P.) or another comprehensive basis of accounting. Based on our knowledge and understanding of your business and industry, we perform inquiry and analytical procedures to obtain a reasonable basis to express such limited assurance.

A review differs significantly from an audit, in which the auditor provides reasonable assurance that the financial statements, taken as a whole, are free of material misstatement. A review does not contemplate obtaining an understanding of the entity’s internal control, assessing fraud risk, tests of accounting records, and other procedures ordinarily performed in an audit.

Where audit or review services may not be needed, Kingston & Knight Accountants can assist you by compiling your information in the form of financial statements. We then prepare financial statements without undertaking to offer any assurance on them. In addition, we are also available to assist you in the preparation of management-only financial statements designed exclusively for internal use.

Contact Kingston & Knight Accountants today on 1800 283 481 to learn more about our Melbourne financial statement auditing services, or email us at admin@kingstonknight.com.au.

kingstonknight-compilations-and-reviews-of-financial-statements

Read more

Business Accounting

Business Accounting

When a Business Accountant can help you grow your business…It may be time to delegate

As a small business owner, you likely enjoy the benefit of having control over your work. You are able to design your own business strategy, set your own working hours, determine your finances, and regulate your workload. Mastering these things is wonderfully liberating, but sometimes it can prevent you from delegating tasks efficiently to aid the growth of your business.

You can risk burning out if you hesitate too much when deciding whether or not to obtain help in running things. Understandably, you may feel as though no one else could possibly know your business like you do, and that nobody could handle your operations like you can.

Being unable to delegate can leave you feeling stressed, diminishing the freedom that should come with owning your own business. Learn to let go and trust others to assist you in handling some aspects of your business, so that you can better spend your time looking after the rest.

Your business’s financial affairs are a good place to start. Choose an accountant that best suits the requirements of your business, and ensure that you trust them to handle your financial information. Handing over control of finances to a qualified and experienced expert will leave you with much more time to focus on your strengths as a business owner.

Often, successful business owners are also expert delegators who know when to accept help, and who to get help from. Learn from them and apply this mentality to your own business.

Dealing with the government
Government bureaucracy and paperwork can be one of the most daunting obstacles when starting a business. Tax filing is just one government requirement which an accountant can manage for you.
An accountant can ensure that you meet your obligations and continue to operate smoothly by:
• Completing and filing required compliance and legal documents for your business.
• Ensuring that your business is kept up to date with tax laws as they develop or change.
• Preparing annual accounts statements.
• Ensuring that your business’s status is updated in the government’s company register.
• Maintaining records of administrative personnel (such as directors).
• Organising and recording stock/share allocation, including in crucial situations such as a business partner leaving or joining.
• Handling your payroll and making sure that your staff’s tax payments are properly recorded.

A blunder when preparing tax documents could cost you a lot of money. A good accountant is incredibly unlikely to make any mistakes, and can probably suggest quite a few ways in which your business can free up money or begin to expand.

If you’re audited
It is statistically unlikely that your business will face a government audit due to the high number of small businesses compared to the relatively small number of auditors. But should it happen, an audit can be stressful, time-consuming, and expensive.

If you haven’t used an accountant’s services before, this would definitely be the time to start. An accountant can advise you on how the auditing process works, and how best to manage it. They can ensure that you comply with any recommendations made by the auditor, and that your business continues to comply with tax laws after the audit is complete – because the government is likely monitoring your business more closely now.

Some accountants offer audit insurance, which protects you from the extra fees you would have to pay your accountant in the event of an audit. Responding to a review, official enquiry, audit, or investigation will involve a considerable amount of work for your accountant, and you won’t have to pay them for this extra work if they offer audit insurance.

Some accounting software includes an ‘audit trial’ feature, which makes it easier for both the government and you to see what transactions have taken place, when, and who they were authorised by.

Applying for overdraft or a business loan
Lending to small businesses has dropped in most countries since the Global Financial Crisis in 2009. This means that it may be more difficult to obtain a loan, and you will require a stronger business case in order to do so.

Hiring an expert Melbourne business accountant will improve your chances of securing credit by demonstrating your commitment to the business. A business accountant will also be able to present useful and relevant information which supports your credit application. They can also respond to any questions or requests for information the lender might make in regard to expenses or revenue projections.

A good accountant will not only assist you in managing the application process, they will also help you decide which loan suits you. An accountant’s knowledge of finance can be of immense benefit when comparing lender interests rates and terms and conditions.

Contact the best in business accounting, Kingston & Knight Accountants, today and speak to one of our expert business accountants on (03) 9863 9779 or email us at admin@kingstonknight.com.au.

kingstonknight-business-accounting

Read more

Business Accountant Melbourne

Should I hire an accountant for my business?

If your business is growing, the answer is yes!

Businesses develop and grow at different rates, but often, this growth is not necessarily linear or steady. A big project or a new client might mean that your business needs to grow quicker than you had expected.
An accountant will be able to assist you the processes involved in growth transitions, such as securing more space for your operations or hiring employees. Accountants can manage financial details (property tax, payroll, employee tax, utility payments etc) on your behalf so that you are free to focus on the core operations of your business.
Cash flow, inventory management, pricing, and other financial variables can be analysed in detail by an accountant through the use of specialist software. They can then use this to give you, the business owner, insight into how best to grow and develop your business. An accountant can even assist you in determining the best time to introduce a new type of product or service.

Planning to take on a franchise?

Get an accountant’s advice

There are some sectors whether taking on a franchise is a relatively accessible, and therefore common, way to start a business. This eliminates some of the common risks associated with starting a business by ensuring that the product or service already has an established reputation and market value. On the downside, you have less commercial freedom this way – as well as increased overheads.

It can be difficult to determine whether or not a franchise is worth taking on, considering all the costs involved. An accountant can help with making this decision. They are able to review a franchise contract and form estimates on income and cash flow based on the information provided by the parent company.

At the end of the day, the decision comes down to you. But hiring an accountant can mean the difference between poor judgement and a well informed decision. If you’re planning on buying any business, you should get an accountant’s advice.

Someone seeking to own their own business may be able to buy one for themselves rather than starting one from scratch. This can remove some of the hard work, but you should always seek an accountant’s advice before committing to the purchase of an existing business. A business accountant can help you make the right decision by reviewing the business’s accounts in detail, and informing you if something looks problematic. For example, a business’s assets, including its equipment and other essential materials, may be leased and not fully owned. An accountant can check these details for you, as well as whether or not the business has any outstanding debt.

It may also be a good idea to consult a lawyer during this process. A lawyer will be able to work with your accountant to discover anything and everything you may need to know about the business you intend to purchase and operate. This will give you the peace of mind to make an informed decision and a sensible offer should you decide to buy.

An accountant’s advice is vital if you are planning to sell your business

As a business owner, it is unlikely that you wouldn’t have employed the services of an accountant at some point before deciding to sell. But if you have, you definitely should hire one before you sell.
A business accountant will be able to prepare your business’s financial records and produce vital documents such as a statement of accounts for you to show potential buyers. With the use of specialist software, an accountant can visualise complex financial information and create useful charts, graphs, and tables which can be used to demonstrate the strength and value of your business.

As part of the due diligence process when a business is being taken over, your accountant will be able to communicate with the buyer’s accountant to ensure that everything is in order.
All in all, an accountant’s services will ensure that you are able to get the most money you can when it’s time to sell the business. Depending on the structure of a sale, the amount of money left after tax can vary. For instance, monthly payments made over several years may be more tax-efficient than a lump sum. Every sale is different, and the services offered by an accountant will ensure that you get the best result when it’s time to sell your business.

Basically, an accountant can help you every step of the way.

At every stage of your business’s growth and development, and accountant can help to ensure things run as smoothly as possible from a financial standpoint. They are able to make your life easier by managing complicated financial matters so that you, as the business owner, can focus on other areas where your time can be better spent.

Contact Kingston & Knight today and speak to one of our expert business accountants on (03) 9863 9779 or email us at admin@kingstonknight.com.au.

kingstonknight-business-accountant-melbourne

Read more

AUDITS OF FINANCIAL STATEMENTS

Audits of Financial Statements

Kingston & Knight Accountants approach to auditing your financial statements begins with obtaining a thorough understanding of your business and industry, including your internal controls, and ends with the expression of an opinion as to whether the financial statements are presented fairly in all material respects. As a part of this process, we identify and assess the risks which may cause your financial statements to be materially misstated and develop our audit strategy in response to those risks.

Prior to, and during the audit, our experts work closely with our clients to develop a service plan and calendar, which includes engagement planning meetings and frequent client communications intended to produce an efficient and cost-effective audit while minimizing disruption of your daily routine. As our planning progresses, we will provide lists of information to be supplied by you and a timetable for delivery of that information. Whenever possible, we will request that information and schedules be provided in electronic formats to permit us to use technology, including data extraction software, for greater ease of process. Our experience has shown that the use of electronic tools has greatly enhanced our ability to complete services efficiently and effectively, while providing useful information to our clients.

Contact Kingston & Knight Accountants today on 1800 283 481 to learn more about audits of financial statements and our Melbourne auditor services, or email us at admin@kingstonknight.com.au.

kingstonknight-audits-of-financial-statements

Read more

ASIC SMSF auditor registration

ASIC SMSF auditor registration

From 1 July 2013, ASIC’s new register for self-managed superannuation funds (SMSFs) came into effect as part of the federal government’s ‘Stronger Super’ reform program. The program was implemented to improve community confidence in the superannuation sector, as well as to maintain the sector’s integrity overall.

The Australian Securities and Investments Commission (ASIC) is responsible for the registration and approval of SMSF auditors, and sets relevant competency standards. As a result, ASIC has the power to suspend, cancel, and disqualify auditors where appropriate.

Under section 128F of the Superannuation Industry (Supervisory) Act 1993, approved SMF auditors are required to comply with a set of ongoing obligations which are set by ASIC. In addition, auditors are required to act in compliance with a set of standards issued by the Auditing and Assurance Standards Board.

From 1 July 2013, any auditor wishing to sign off SMSF audit reports must be registered with ASIC. Applications for ASIC registration should have been made by 30 April 2013, but a more detailed timeframe can be found on ASIC’s website. There are a set of minimum requirements set by ASIC which apply to those wishing to register as SMSF auditors. These requirements relate to education, experience, and general competence as well as maintaining professional indemnity insurance.

Existing approved SMSF auditors may have applied for a new registration in compliance with transitional arrangements in place between 31 January 2013 and 30 June 2013, which would have exempted them from some of the registration requirements.

More detailed information can be found in ASIC’s Regulatory Guide 243 Registration of self-managed superannuation fund auditors and in Class Order (CO 12/1687).

Overview of an SMSF Audit

Australian superannuation funds are subject to the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR).

Under section 35C of SISA, all superannuation funds are required to be audited on an annual basis regardless of their size of type. There are two components to these audits:

• Audit of the financial report – In order to enable the auditor to come to a conclusion based on the fair presentation of the financial report in compliance with appropriate accounting policies. This part of the audit must be conducted in compliance with the Australian Auditing Standards.
• Compliance audit – This enables the auditor to come to a conclusion relating to the compliance of the trustees with the requirements laid out in the SISA and the SISR. A compliance audit is conducted according to the requirements of the Australian Standards of Assurance Engagements.
When providing an audit report, the auditor is required to use the ATO approved form. This form covers both the compliance audit and the financial report audit. An auditor’s considerations must be made in accordance with the sections and regulations specified in the approved form of the audit report.
SMSF audit reports are not required to be lodged with SMSF Annual Returns. Regardless, details of compliance breaches or qualified audit reports must be provided.

What is an SMSF?

A working definition is provided in section 17A of the SISA. According to this section, an SMSF generally has the following traits:
• It has less than five members;
• Each trustee or director of the corporate trustee is a fund member, unless the fund is a single member fund. In the case of a single member fund, the sole member is either the director of a corporate trustee, or one of a pair of directors which are related; or one of a pair of trustees of whom the additional trustee can be anyone besides an employee of the member (unless the employee is related).
• Each of the fund’s members is either a trustee or a director of the corporate trustee;
• None of the fund’s members are employees of another member, unless they happen to be relatives.
• None of the trustees, or their directors (if a corporate trustee) receive remuneration for duties or services performed in relation to the fund.

If you require an ASIC SMSF auditor accountant contact Kingston & Knight today on (03) 9863 9779 or email us at admin@kingstonknight.com.au.

kingstonknight-asic-smsf-auditor-registration

Read more