Accountants query AUSTRAC on outsourcing demands

The Australian Transactions Reports and Analysis Centre (AUSTRAC) has been challenged by the major accounting groups over its new outsourcing guidance which the groups suggest contain elements which are not possible.

Chartered Accountants Australia and New Zealand, CPA Australia and the Institute of Public Accountants have told AUSTRAC that while they are generally supportive of the draft guidance they are disturbed by what they have discovered via due diligence.

That due diligence has occurred around whether software options actually exist capable of assisting accounting firms and particularly small accounting firms in meeting the obligations AUSTRAC expects of them.

As well, they have questioned the existence of specific qualifications which outsourced providers would be expected to hold.

“….having undertaken some simple due diligence on three or four software offerings for the Australian market we found that the information available publicly means that many of the checks the draft Guidance suggests should be undertaken are not possible,” the accounting groups said.

“Of particular concern in the draft Guidance is the expectation that a software provider should be able to tailor its offering to ‘your business’s unique ML/TF risks.’ We believe our members will understand this to mean software that can be customised with their business’s details, as they currently do in their accounting software, such as Xero.”

“If, in fact, the expectation is to tailor to specific AML/CTF risks, the draft Guidance would have more value if it provided an example or a case study to demonstrate the degree of tailoring expected,” the joint submission said.

“Equally, we are not aware that it is possible to obtain AML/CTF qualifications from a recognised educational facility or receive a form of accreditation which would indicate that an outsourced service provided was suitably qualified. Yet the draft Guidance suggests considering, and verifying, ‘a providers qualifications in Australia’s AML/CTF regime and your industry’.”

“We seek for the draft Guidance to identify the specific qualifications AUSTRAC considers providers should hold,” it said.