Australia Ethics Board Proposes Clearer Outsourcing Standards

Australia’s Accounting Professional and Ethical Standards Board (AFESB) wants accounting firms to be more transparent about when they will outsource, where the work will go and how they plan to manage risks, the Australian Financial Review reported.

These proposals appear in APES GN 30 Outsourced Services.

“Areas such as disclosure to clients, confidentiality of client information, integrity of information transferred between professional accountants and the outsourced service provider, and control and supervision of the work performed are areas addressed in the guidance note,” APESB chair Kate Spargo said.

The Big Four accounting firms are often already disclosing that they “may” outsource portions of work in their terms of service agreements which clients sign, an APESB spokesman says. The new guidance, it is hoped, will encourage them to discuss the details of outsourcing with clients more explicitly as the level of disclosure are varied.

The guidance is designed to provide a consistent view of what firms should be disclosing and assist small to mid-tier firms especially in developing better terms of service agreements. Grant Thornton head of professional standards Keith Reilly says the guidance is an unnecessary compliance burden.