InsightsTop 3 Issues Catching Advisors Out
Check out the top three QBCC related issues catching out advisors in 2023.
1. Not preparing General Purpose Financial Statements (GPFS)
Many advisors are only becoming aware of this requirement the hard way – after they have applied for an increase to turnover.
GPFS are now a reality for anyone lodging a new MFR report.
For firms without an audit team this will likely require an outsourced solution. In addition, you’ll need to upskill your knowledge on the intricacies of AASB’s and GPFS.
Engagements with your construction clients will need to cover the increased manpower and professional skill required to prepare GPFS. We estimate the average increase to construction client engagements will be between $5-10k. Some accountants will have no choice but to exit their QBCC clients.
2. Not being across the MFR guidelines
Here are some basics that catch out many advisors:
Net Tangible Asset and Current Ratio requirements – no real change to the requirements BUT the regulator is more likely to query your position and underlying assumptions. You need to be very certain the assets and liabilities used in these calculations are ALLOWED.
Current or Non-Current – definitely don’t assume based solely on generally accepted accounting principles. The MFR have their own definitions of current!
Related Party Loans – usually NOT ALLOWED. If you aren’t certain what a related party loan is and how MFR works click here for more on this.
You’ll need a working knowledge of the MFR regulations as well as the AASB’s, in particular, AASB 15 for WIP reporting, AASB 16 for leases and Tax Effect Accounting.
Mage Advisory provides a variety of CPD training modules for Advisors.
Click here for an example of our training slides.
3. Not understanding what draws the QBCC’s attention
The QBCC reviews data from a myriad of sources, well beyond Annual Reporting.
Here are the three key issues that attract financial audits:
- Revenue breaches of over 10% Maximum Revenue
- Homeowner and contractor complaints to the QBCC
- Legal disputes regarding payment that make their way into the public domain
Proactive management of these issues is a lot easier than dealing with the regulator on a strict timeline.
Mage are Specialist Advisors in the area of QBCC.
Call us for a chat about your QBCC issues.
“Proactive management of these issues is a lot easier than dealing with the regulator on a strict timeline.”
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Founded by Michael and Ashley Garrone, Mage Advisory is a specialist business and accounting advisory firm, committed to sharing their expertise every day for the benefit of their clients, their profession and their greater network.
This publication is © Mage Advisory and is for general guidance only. Legal and financial advice should be sought before taking action in relation to any specific issues.