The accounting industry has grown in the past 5 years in Australia showing annual growth of 2.1% since 2011. This is because random audits by the ATO are something normal. Businesses should expect them and be prepared for the same. While they may not find anything wrong with the preparation or need for adjustment to be implemented by a firm, there will be costs that will be incurred during the entire process that can sometimes run up to thousands of dollars. An audit insurance becomes the basic shield that you will need to protect yourself against the effect of the costs involved as a result of the audit. An audit insurance company will usually charge a small fee as the time and costs for the entire audit to take places will be taken care of.
What is Audit Protection Insurance
In case you are wondering what this is, audit protection insurance is a policy that an audit insurance company offers businesses, superannuation funds that are self-managed or to an individual. They are usually designed to cover the expenses that a business or individual is likely to incur as a result of an audit or review conducted in their premises. It’s the Australian tax office together with other state and government bodies that are in charge of conducting these reviews and domestications. They are usually conducted to ensure that there is compliance with legislative and tax requirements. Some of the things that the audit may cover include superannuation guarantees, goods and service tax, workers compensation among many others.
Choosing a Company
When it comes to audit protection, the services of one insurance company policy always tend to be different from the next. Therefore, before you choose to buy a policy from an insurance company, ensure that you are armed with the relevant information first before proceeding. Also ensure that you understand the different terms and conditions before agreeing to anything since it is typical to find an insurance company that will refuse to pay in the event that they have a condition they put forward, and it was not met. This is very important to make certain that your interest comes first and is well protected. Additionally, depending on the individual or business that is applying the cover may differ. Therefore, ensure the cover that you go with is one that is suitable for you.
What Are Covered
An audit insurance company normally offers their policy to individuals and businesses to cover the bits of undertaking the random audits, revisions as well as investigations so that compliance with the relevant laws is established. The audit and reviews that are usually covered will include fringe benefits tax, payroll tax, goods and service tax, stamp duty among other legislative and tax requirements. Other costs like bookkeeping fees, legal fees and the advisor such as the surveyor’s fees are also included in other covers. Depending on the audits that will take and the type of business that are involved, professional fee may differ.
That said, there are many benefits that come with having insurance audit covers for a business and with the increased random audits across Australia, you ought to be protected.