Auditor Prohibitions Explained
Why Your Auditor Can’t Do Everything
One of the most common questions we’re asked is:
“Our previous auditor prepared our BAS and tax return — why can’t you?”
It’s a fair question, especially for community organisations that value continuity and efficiency. The short answer is: auditors must remain independent. That independence is what gives members, regulators, and funders confidence in your financial statements.
This article explains why those boundaries exist, what work must be done by registered professionals, and how this actually protects your organisation.
Auditor Independence: the foundation of trust
Auditors are required to comply with strict professional and ethical standards, including APES 110 – Code of Ethics for Professional Accountants.
A key principle of this Code is independence — both in fact and appearance.
In practical terms, this means:
An auditor cannot audit their own work
An auditor cannot take on management responsibilities
An auditor must not perform certain services that create self-review or advocacy threats
These rules are not optional, and they don’t change based on how helpful or experienced a prior adviser may have been.
Why auditors cannot prepare BAS or tax returns
Preparing or lodging:
Business Activity Statements (BAS)
Income tax returns
PAYG withholding
Superannuation compliance
Tax calculations or tax advice
is tax agent or BAS agent work, not audit work.
Under Australian law, these services must be provided by a registered tax practitioner through the Tax Practitioners Board.
You must be registered to provide tax agent, BAS, or tax (financial) advice services for a fee or other reward.
If an auditor were to prepare your BAS or tax return and then audit the resulting figures, they would be reviewing their own work, which is expressly prohibited.
You can verify registration or find a practitioner via the Tax Practitioners Board’s public register.
Bookkeeping services that require a BAS agent
Many organisations are surprised to learn that some day-to-day bookkeeping tasks are regulated.
A registered BAS agent is required when the fee for services includes:
Preparing or lodging BAS or IAS
Calculating GST obligations or entitlements
Coding transactions that affect GST outcomes
Providing advice about GST, PAYG or BAS reporting
A helpful summary of what constitutes BAS services is published by the Tax Practitioners Board and is worth reviewing before engaging a bookkeeper on a fee for service.
Auditors may review accounting records as part of an audit or review engagement — but they cannot prepare or correct BAS-related information.
Asset valuations must be done by registered valuers
Another common area of confusion is asset valuations, particularly land and buildings.
For audit purposes:
Valuations must be independent
They must be performed by a registered valuer
In Queensland, valuers are regulated by the Valuers Registration Board of Queensland.
This ensures:
Appropriate qualifications and professional standards
Independence from management and the auditor
Reliable, supportable evidence for financial reporting
An auditor cannot prepare a valuation, select a value, or adjust an asset balance themselves.
Why this actually benefits your organisation
These separations of responsibility exist to protect you, not to create extra work.
They ensure:
Financial statements are credible and defensible
Committee members are protected from governance risk
Grant providers and regulators can rely on the reports
Auditors can issue an independent conclusion with confidence
Clear role boundaries also reduce the risk of disputes, restatements, or qualified audit opinions down the track.
The practical solution
Most well-run organisations use a team approach:
A registered bookkeeper or BAS agent for day-to-day compliance
A registered tax agent where required
A qualified, independent auditor or reviewer for assurance
Independent valuers when asset revaluations are needed
Each professional does what they are legally allowed — and best qualified — to do.
