Government data matching across New Zealand has become very sophisticated. The amount of data readily accessible to the government is not only more than ever before, it is also more current and updated.
A wider outlook reveals that governments around the world are looking to transfer pricing or intercompany transactions with a push for taxpayers to ‘pay their dues’ in countries where they earn income. This doesn’t only affect larger companies like Google or Apple, but will have implications for multinational SMEs in New Zealand too.
There is a heightened focus also on crypto currencies (e.g. Bitcoin) and the cash economy.
To safeguard against the risk of fall-out with their clients as a result of the unpredictability of when and how much audits and government scrutiny will cost, it is increasingly prudent for accounting firms to insure themselves with an insurance solution that is designed specifically for accounting firms to provide a no net cost/no loss solution.
What the recent claims trends reveal
Accountancy Insurance, with its wide policy coverage across both New Zealand and Australia, has seen through more than 20,000 Audit Shield claims. According to Accountancy Insurance’s data, on average, in excess of one million dollars is paid per month in claims across New Zealand and Australia.
Inland Revenue (IR) has previously launched audits via Client Risk Reviews, but now there is a trend towards more specific audits initiated upfront, rather than expanding out of Client Risk Reviews. GST verifications and audits of income tax returns are also higher, and new Audit Shield claim registrations have grown by over 40% so far in New Zealand for the 2018 calendar year.
How Accountancy Insurance can help
Accountancy Insurance has over 14 years’ experience of servicing the accounting industry – it is all we do.
Accountancy Insurance’s flagship offering, Audit Shield, covers accountants’ professional fees and the fees of experts, should your client be subjected to IR initiated action in relation to a lodged return. This may include phone calls, risk reviews and right through to a full audit.
An appropriate insurance solution for protecting your accounting firm and your clients against the costs associated with the ever increasing impact of IR initiated action in relation to a lodged return is not one that should be gambled with.
Accountancy Insurance was founded by accountants, for accountants, and we understand that you need a solution that best suits the needs of your firm and most comprehensively covers your clients. When you chose to implement Audit Shield you can be confident that your firm and your clients will be comprehensively protected.
Key features and benefits of Audit Shield:
What does Audit Shield cover?
Audit Shield provides broad cover with no excess for an accountants’ professional fees, third party professional fees, audits relating to prior lodgements (whether lodged via your firm or a previous firm), specialist fees including tax experts, lawyers or other specialists, plus much more.
Will it cost me anything to implement Audit Shield in my firm?
No. Each of our Audit Shield client firms enjoys the services of a dedicated Account Manager. They will assist you with the set up and implementation of Audit Shield, including the creation of a comprehensive client mail-out to facilitate the offer to your clients. Access to our Audit Shield software platform is also provided to ensure ongoing administration is simple and effective.
Who is the policy underwritten by?
In New Zealand Audit Shield is underwritten by certain underwriters at Lloyd’s, so you can be sure that all eligible claims relating to audit activity – both big and small – are covered with no risk to the accounting firm.
If I make a claim how simple is the claim process?
Claims are managed by a team primarily of former accountants, which means we understand the audit process and what is involved in order for an accounting firm to best serve their clients. After you lodge a claim Accountancy Insurance will work with you on every step of the claim process.
How much work is required by the accounting firm to implement and offer the solution to my clients?
Our turn-key process, which is made up of a combination of technological smarts delivered by hands-on people makes the process happen. This means minimal work is required by your accounting firm. We make it happen.
Audit activity is unpredictable. Our data shows GST verifications and audits of income tax returns are increasing, and data matching methods are more sophisticated than ever. Thankfully when it comes to ensuring your accounting firm and your clients have adequate audit activity coverage, you can be confident that Accountancy Insurance’s Audit Shield, is a no net cost/no loss solution.
For more information on how Audit Shield can benefit your accounting firm and your clients, contact the Accountancy Insurance team today.