The Accounting Professional and Ethical Standards Board (APESB) has issued an exposure draft of a proposed guidance note APES GN 30 Outsourced Services. http://www.apesb.org.au/uploads/media-releases/apes_gn_30_exposure-draft.pdf

The proposed APES GN 30 is intended to provide guidance to accountants in public practice who either provide or utilise outsourced services. At Omega Partners we take outsourcing seriously and we have ensured that the policies, procedures and practices within our firm comply with APES GN 30.

Proposed APES GN 30 indicates that professional accountants in public practice who provide or utilise an outsourced service should have an outsourcing agreement, which clearly specifies the responsibilities and obligations of the parties to the outsourcing arrangement. Twenty-nine specific issues are identified that should be addressed in that agreement.

You should ensure that whatever outsourcing provider you use to prepare your Australian SMSF, Company or Trust financials and income tax returns addresses the following

(a) the duration of the Outsourcing Agreement including commencement date, minimum and maximum terms and provisions for termination
(b) a description of the type and scope of Outsourced Services to be provided;
(c) details of how the Outsourced Service will be performed;
(d) details of how changes in service requests will be conducted;
(e) representations and warranties;
(f) the required service levels and performance requirements including; contract termination and disengagement triggers; contract reward and penalty considerations; business continuity, security and intellectual property break-up and recovery;
(g) details of the initial transition process from the Member’s operations to the Outsourced Service Provider, including actions and responsibilities of the parties in respect of the transition process:
(h) the pricing model including payment terms and how changes that affect the execution of the process during the agreement will affect pricing;
(i) the procedure for reimbursement of expenses;
(j) ongoing management of confidentiality, privacy and security of information;
(k) taxation obligations, including GST considerations;
(l) the process for managing the ongoing relationship including qualitative and quantitative measures to monitor and review performance;
(m) the nature of the information to be provided by the Member and the Outsourced Service Provider;
(n) the terms of any limitation of liability to the effect that any subcontracting by the Outsourced Service Provider of the Outsourced Services should be the responsibility of the Outsourced Service Provider including liability for any failure on the part of any subcontractor;
(o) audit and monitoring procedures;
(p) a provision that allows the applicable Professional Body access to documentation related to the Outsourcing Services including the right to
conduct on-site visits to the Outsourced Service Provider;
(q) the terms of file retention by the Outsourced Service Provider that are sufficient to meet the needs of the Member or as required by law or regulation;
(r) any use of third party resources;
(s) obligations of the parties to the Outsourcing Agreement;
(t) details of reports or other anticipated outputs, including: expected timing intended use and distribution of reports;
(u) accessibility by the Member to the Outsourced Service Provider’s files;
(v) format, form and quantity of data, that is readable in printed or electronic form that is to be provided by the Outsourced Service Provider at the end of the Agreement;
(w) ownership of documents and records;
(x) that the Outsourced Service Provider is responsible for the accuracy and completeness of the information supplied to the Member;
(y) well-defined dispute resolution mechanisms including jurisdictional considerations;
(z) procedures for changes in business structures and/or ownership structure;
(aa) the use of external service providers (if any);
(bb) details of liability and indemnity insurance;
(cc) the conditions for terminating the Outsourcing Agreement such as:Outsourced Services the Outsourcing Agreement no longer makes economic sense;
poor service, non-performance or non-payment; or a change in control or management at either of the parties to the Outsourcing Agreement.