Accountant wants third party access to my SMSF account?

I have just had a meeting with my accountant who wants me to allow him access to view the day to day running of the SMSF bank account to ensure they are reporting everything to the tax office. For the last 10 years I have just given him the statements and the share trading history and he has prepared the accounts and tax returns. Has something changed and has anyone come across this before? It just seems like a step too far.

 

These days the software will do a daily data import and it makes the fund accounting cheaper to work on. In these days of rising costs it helps keep costs down. Even the auditor can verify balances and review transactions. The transactions can have rules applied so for example he/she doesnt need to allocate bank fees. It reads the narration and does it.

All listed investments can be valued automatically AND their existence matched with registries and more. They can also do a data feed with broker cash and broker trades. Automates buys and sells

The software also automates complex things like member allocations, pensions and much much more. Anyone NOT using such software isnt doing the right thing IMO.

Surely they mentioned this ?

 

They certainly didn't mention cheaper to work on but yes they did talk about the other things.But why do it on a daily basis and not once per year?

 

The bank feeds are done automatically on a daily basis. It does not mean that your accountant is looking at your stuff every day.

 

I can assure you we look at client data feeds only when needed. I have better things to do and its not interesting anyway.

One benefit of the progressive data is starting a new pension. The accountant may have most / all the information to draft financials to a point in time. Calculated balances and initiate pension docs etc.

This wont make the work cheaper necessarily but it can. In many cases it avoids escalating costs by keeping a cap on time. The artificial intelligence is getting better each month. So many things we once did manually (calc profit on sale etc) is now simple. Tax elements of ETFs and franking credits etc. It also helps with many compliance requirements like TBAR reporting, taxed elements, eligible service period, tax free elements and so much more. Just generating the tax return now is a click where it used to be a huge issue. Actuarial matters are one area where you can be assured of major time saving. ie one member on pension, another is not.

 

Data feeds yes.... a login to the bank account via internet banking so that he can shuffle money around, no.

 

Hi Ned

I have 3rd party access to most of our clients - as long as it is "enquiry" only you will be fine, it will enable the accountant to download data to the accounting system which will improve efficiencies significantly. Same will apply to trading and loans and means you don't need to provide the accountant info at y/e they just do it all.

Remember - they cannot transact, only enquiry.

Cheers Ivan

 

Thanks guys!

 

When you say "software" what software are you referring to? My accountant has a new product about to be launched called Centric which I will pay a monthly subscription to and be able to input all our assets and liabilities incl funds within superannuation, internationally directly held shares etc and it will track our P & L and spit out graphs and info for reporting on specific days etc.Is this similar or are you referring to something specifically run for SMSF?

 

All these forms of software are similar. BGL Simple Fund and Class are the most popular. They are smsf specific accounting, tax and member compliance reporting platforms that use artificial intelligence driven processes to reduce the costly compliance burden and ensure compliance is well supported. They can do this because smsfs are functionally similar and own investments.

Centric - I believe is a administration service that uses class as its platform. You are paying an accountant and an administration service. So its outsourced ? The delineation about who does what and what you are paying for should be defined and understood. They may be doing this as the accountants are unlicensed for financial advice however the admin service wont be giving financial advice for free either. Just who is doing the admin work & accessing your information ? Jenny from the Phillipines ?

 

I will not use a offshore outsource for anything. I know your view is different having run a outsource service. The amount of calls I get from cheap providers is quite disturbing. I need to know who has access to our client data. I also know some offers of late have been just dumb prices like $139. I question the capacity for any qualified person to perform professional work and form an opinion at that cost. A race to the bottom means you get what you pay for sometimes. I couldnt recommend that to any client. The sole value proposition to outsourcing is cheaper.

The ATO has previously publicly stated their concern for some of these "commoditisation" providers and the impact on quality. The ATO view remains that the sign off must occur by a audit practitioner in Australia. So this means their work is done offshore. Thats a sweat shop risk!! To clients financial information concerning investments, bank details and more (HIN etc) !! Is that practitioner a independence risk ?? The recent proposal to extend audits for some funds to one in three years seemingly was shelved after this very issue was also bought to the table. But nothing further has yet been said.

Our low cost / fixed price smsf provider is a Melbourne CA practice with a specialised team. Led by a CA who is member of a few smsf bodies that I speak to from time to time especially when a curly smsf issue pops up.

 

TPB(PN) 2/2018 refers to services not banking. And then uses the context in more detail and doesnt include a banking transaction. No foreign payments eg paypal for that reason. I'm discussing "outsourcing activities" and those involving client information and data either directly or indirectly.

You seem touchy about my comment but we do stand by it. This must be something you encountered daily when you were offering these services - opposition to this model. An aggressive response does not mean we are wrong to have this approach. Our requirement well exceeds expected norms. We have to consider some clients have financial investments at risk of fraud if our data is compromised and work to the best practice possible. I describe it as we act like the reserve bank gold vaults when all we hold is paper. We assume the paper has value no matter how trivial it seems. I would argue we sit we outside what other firms do. Bizarrely so.

We strongly control all our data and services which often includes client data or information. We have layers of multiple access controls for every aspect of data. I just reviewed my current position and I need between 9 and 13 sequential facts to access our systems. Then I need passwords to do other things like lodgements, ATO portal etc. And all of those are different too. Does my head in but NONE are the same. If one is wrong it fails. When I was in Rome last month I found two different 2FA systems will lock me out if my phone is not physically inSydney. Location settings are a additional test for Google authenticator for example. I wont name the other. After resolving that it then blocked my device I was using and it needed IP address permissions from our IT teams (two of them !!). A day later I was fine.

We dont use Xero. Or MYOB. Both failed a security requirement we have although MYOB seemingly now may comply but its too late and was one of the worst as it required client data to be on our local server and could be copied and open as a read only file. Xero fails as its access controls are below our requirements. If a client uses Xero/MYOB etc we will access their data when invited however. A range of software has failed our requirements eg we dont accept dropbox links etc as it exposes the client to risk as well as us if an infected file is within the client files. Skype is blocked for a range of reasons. The major one is identity spoofing is too easy. We offer clients an alternative that uses no third party software excepting their browser (apple require a free app). A independent party monitors every file uploaded for malicious and restricted content and to ensure content matches the file eg Install.pdf may contain a non-PDF file. Our own software performs a secondary check.

We dont retain ANY client data with Sage Handisoft. We have not adopted cloud tax for example for that reason. Our cloud based server is a equal or more secure option or we have no reason to change at this time. Sage Handisoft only allow screen sharing for the product OR product access permissions through login which pose no concerns to us when a support issue is raised. 99% of support issues require no data access at all and are evident bugs tested by Handisoft at their end using their own data. That problem would be patched and a update released promptly and usually involves impact on most firms. At that time they will request access.if it is required. How we grant access may be affected by the data involved.

BGL SF 360 data is hosted and clients agree that we act as their agent and agree they own all the data. We freely transfer simple fund data to other firms if requested as we acknowledge the client owns this data right if we were paid and they paid us. If they dont pay we wont transfer any data. BGL wont allow it either unless we authorise the transfer. We advise clienst we dont warrant BGL data to be free of risk as it is not on our servers and within our control but do limit our staff use to permitted persons and permitted roles. BGL advise us that their staff are not located offshore. They are quite proud that the staff are located in Melbourne but their servers could be elsewhere. Data is held in a manner that without software access compilation of useful information would be impossible as the data is held in a secured database like structure according to the Director. Non users cannot see data fields. The auditor we have chosen has access and does not engage or use contract staff or offshore staff etc. Their staff are engaged and work from their melbourne office. We check this annually incl three weeks ago. They store their data on a secured server much like us.