Licensed accountants offering 'risky' SOAs

CEO of Licensing for Accountants, Kath Bowler, says while the practice of unlicensed accountants using licensed providers to issue advice could be a "good option" for some accountants, she is “not convinced” that the documents created, are compliant.

This can include statements of advice (SOAs), for use where a licensed accountant or adviser is effectively formulating the advice, but the unlicensed accountant is handing it over to their client.

Ms Bowler said this practice could potentially mislead clients, because while an unlicensed accountant might distribute the document to the client, they are effectively not issuing the financial advice.

“The risk is that the client perceives that the accountant is giving the advice. That’s a huge one, because if [the accountants are] the ones collecting the data and then delivering the document back, even though their name isn’t on the document, the client will perceive the person who handed them the document and collected all the information as the one giving advice,” Ms Bowler said.

“I’ve had a look at a few [documents] and I’m not convinced that the documents that are being produced are compliant, so that could have an impact, because they’re not really doing a lot of checks and balances to give appropriate advice and SOAs.”

Given the number of accountants who have not obtained their license, Ms Bowler says the practice could be a "legitimate strategy" for accountants, but further legal inquiries need to be made to ensure the documents produced are compliant.

“We think it has a lot of potential considering how many people chose not to get licensed but just want to get a bit more advice and comfort around how these models can work before we start ... supporting them,” she said.

“We’re exploring [the issue] and getting some further legal advice on that. I can see it as a solution but I can see it’s potentially got a lot of risks if not done well."

Ms Bowler added that both unlicensed and licensed accountants need to ensure they are operating within legislative rules, and applying the necessary checks and balances when going ahead with the practice.

"For the licensed provider, they need to ensure they can meet their licensing obligations including appropriate advice when in many instances, they won’t have met the client," Ms Bowler said.

"For the unlicensed accountant, they need to ensure their clients are not perceiving that they are the provider of the advice.  From a reputation point of view, they should also be concerned about the quality of the advice being provided by the licensed provider."