From time to time accountants are asked to value shares in private companies. Explain the Methodology When undertaking this task the accountants should always explain in their report the methodology that has been adopted and any assumptions that have been made. It is worth pointing out that much depends on the circumstances of the buyer,…

It has come to the attention of the Claims committee that there are a number of issues that are affected by the continually changing income tax legislation that warrant obtaining expert opinion in particular specialised areas. Due to the changing income tax legislation, and the introduction of new legislation, it is extremely difficult for practitioners…

The Abacus Claims Committee has become aware of the following situations: Arranging Loan Finance Accountants can find themselves in difficulty if they are arranging loan finance from one client to another of the accountant’s clients. Apart from possible professional indemnity claim implications, there is the question of whether such activity by the accountant forms part…

It is a fact of life that many business partnerships fail. Some interesting statistics: In the USA between 2007 and 2010 the small business failure rate rose by 40%. Businesses with multiple owners are more likely to survive than sole proprietorships, although 72 % of small businesses are sole proprietorships. Business LegalMore than 50% of…

Cloud computing is an important technology and has been rapidly adopted by major corporations, governments and others right around the world, and for good reason. But like all technologies of this nature users need to be careful when utilising them. A Cost Saver Cloud computing involves storing data on remote servers that are operated by…

All insurance policies contain some exclusions, including professional indemnity policies. Unlike the Abacus policy arranged with Lloyds of London, some Professional Indemnity policies contain exclusions which do not provide optimal cover for the insured. Below are examples of some of those exclusions which are not part of the Abacus policy: Intellectual Property Damages resulting from…

Conflicts of interest may arise during the course of conducting an accounting practice. In the event that a conflict does arise there is a potential for a professional indemnity claim as well a possible breach of a code of ethics. How to Avoid Conflicts The Accounting Professional and Ethical Standards Board (APESB) Code of Ethics…

Professional liabilities are covered under a “claims made” policy wording. “Claims made”, means that providing a policy is in force at the time a claim is made against the insured or when the insured becomes aware that a claim may be made, then subject to the policy conditions, cover is provided, no matter when the…

When should a possible claim be notified in order to comply with the requirements of your professional indemnity policy? In every Professional Indemnity proposal form, the following question or something similar, is asked: “Are any of the partners/directors after enquiry, aware of any circumstances which are likely to give rise to claims against the firm…

Background A Division 7A dividend is an amount deemed by the Australian Tax Office (ATO) to be assessable income of a shareholder of a private company that attempts to make a tax-free distribution of profits to the shareholder, or the shareholder’s associate. Division 7A may apply to loans, payments and debts forgiven on or after…