Accountants moving to become licensed have been given a generous run by the Government, but are failing in high numbers by not providing fundamental information when applying for a licence according to a former ASIC licensing specialist.
Know Compliance licensing specialist, Frank Varga, said accountants have received a good deal in the new licensing and transition arrangements but many were still failing to provide core information needed to support a licence application.
"It is a good deal they have received, but when they look at it they will see it still has fair bit of compliance they need to deal with. However the government has been generous in the streamlined approach and the assessment of their experience and the addition of them not having to be audited," Vargas said.
"There is a different licensing regime in place but the government has been generous in putting them into the tent."
Vargas said that around 50 per cent of accountants seeking to obtain a licence have failed in their application and at present only 50 licences have been granted by ASIC.
Vargas said most of the failures are not related to the unsuitability of accountants to provide advice but rather the provision of inadequate information or the failure of responsible managers to be appropriately qualified to hold a licence.
He said common failures include providing inadequate financial information with accountant applicants unsure under which business structure they should apply and then submit cash flow projections and financial position statements of that vehicle to support the application with some applications appearing to present applicants as insolvent.
Vargas also said nominated responsible managers are either not meeting the minimum educational requirements detailed by ASIC or if they have completed short courses they did not cover the broad authorisations being applied for under the licence.
Despite this he believes that there will be rush for applications as the transition period comes to a close in 2016 similar to those seen under the licensing arrangement of the Financial Services Reform Act and Credit Act.
"It is still a total unknown as to how many will apply with the accounting bodies stating it may be in the thousands. I worked with ASIC during those other periods and we saw a mass of applications but at present it is still hard even for ASIC to ascertain how many will apply."
