AFS Licensees and Accountants with Limited Licenses

Audit Requirement

Holders of an Australian Financial Services License are required to have their financial statements audited.

AGS 1068 prescribes the audit requirements for Australian Financial Services Licensees under the Corporations Act 2001:

“Section 989B of Part 7.8 of the Corporations Act requires an AFS licensee to lodge a profit and loss statement, balance sheet and auditor’s report with ASIC for each financial year.

Regulation 7.8.13(1) of the Corporations Regulations 2001 requires that for subsection 989B(3), the auditor’s report on the profit and loss statement and balance sheet in respect of a financial year be lodged with ASIC in the prescribed form.

ASIC requires the profit and loss statement and balance sheet and notes to the Statement of Financial Performance and Statement of Financial Position to accompany ASIC Forms FS70 Profit and Loss Statement and Balance Sheet and FS71 Audit Report.”

We would highly recommend Anderson Munro & Wyllie’s service – they are well priced, both practical and reasonable in their approach to small AFSL holders, and efficient at turnaround times.


Audit Process

The final audit can only begin once the year end journals have been processed, for example provision for bad debt, depreciation, correct allocation of assets purchased etc.  We may perform an interim audit to verify transactions for part of the year. During our audit we select a sample of transactions from your general ledger to test to supporting invoices or other documentation and bank statements.  We also do a review as to the reasonability of the transactions and comparison to prior year.  Payroll is tested to payroll records, personnel files and authorities.

The audit of the balance sheet can only be performed after year end, when we verify all material balances to third party supporting documentation, assess the recoverability of debtors and the completeness of creditors.  We also do reasonability tests of your GST liability, obtain confirmations of loans and verify fixed assets among other tests.

For your licence compliance, we obtain a copy of your AFSL manual, your procedures and policies, your training, complaints and breaches registers, your office structure and your cash flow forecasts.  We also read your minutes of meetings and other compliance documents that you have in place.

To ensure the audit process goes smoothly, we send out an “audit preparation” email before the audit, with checklists as to what we will require during our audit.  Of course samples of transactions are only taken during the audit and therefore will be advised once we have assessed the information provided to us.

Once we are happy that the figures are reasonable, the financial statements are finalised and signed, the FS70 is completed and we sign the audit report and complete the FS71.  This is all then submitted to ASIC within the timeframes described.

At AMW (Audit) Pty Ltd, we have many years’ experience in auditing AFSL individuals and companies.  We can also assist in the compilation of financial statements and the completion of form FS70.

Depending on the size of the audit and the number of transactions, the audit can be performed either at your place of business or our offices via email or courier.  All these factors will impact on the audit fee quote which is based on the number of hours likely to be spent by various levels of staff.

Martin Shone
Martin Shone
Martin is a member of Chartered Accountants Australia and New Zealand, a fellow of the Association of Chartered Certified Accountants and a ... Read More...
Amit Gadani
Amit Gadani
Amit is an associate member of Certified Practising Accountants Australia (CPA) and holds a Bachelor’s Degree in Accounting and Taxation. Am... Read More...