What Does APES 110 Mean for Accountant Finance Referral Fees?

Quick answer: APES 110 does not treat referral commissions as ethically invisible. Receiving a referral fee or commission relating to a client can create a self-interest threat, so an accountant needs to consider safeguards, disclosure and any independence restrictions that apply. Assurance engagements require particular care.

For an accounting practice, the referral agreement is only one layer. The professional code still applies.

Why does APES 110 care about referral fees?

A payment can create an incentive that affects — or appears to affect — professional judgement.

APES 110 identifies referral fees and commissions relating to a client as capable of creating a self-interest threat to objectivity and professional competence and due care.

What should be disclosed?

The applicable APES 110 provisions should be checked in their current form. Historically and in current compiled materials, Australian-specific requirements have included written disclosure of matters such as the existence of the arrangement, the other party and the basis or method by which the benefit is calculated.

The practice should use its current professional-body guidance and compliance procedures rather than relying on website summaries alone.

What about audit, review and assurance clients?

This is where the answer becomes more restrictive.

APES 110 contains independence standards for audit/review clients and other assurance clients, and commissions or similar benefits in connection with assurance services can create threats that are not treated like ordinary business-services engagements.

Do not assume that because a referral-fee arrangement works for one client category it automatically works for an assurance client.

Practical approach

Before launching a referral program inside an accounting practice:

1. document the arrangement;
2. identify which client categories can participate;
3. establish written disclosure wording;
4. define the introduction boundary;
5. decide who records client consent;
6. confirm how referral income is recorded and taxed.

GPS Finance can document the finance-broker side of the arrangement; the accounting practice remains responsible for its own professional obligations.

Related referral guides

• Can accountants receive referral fees?
• Finance referral rules for accountants
• Do I need a credit licence to refer finance?
• GPS Finance partner program

Sources and verification

• APESB — APES 110 Code of Ethics

General information only. Referral, licensing, professional-conduct, tax and disclosure obligations depend on the activity, profession, client and arrangement. This is not legal, tax or accounting advice. Check the requirements that apply to your practice before relying on a referral exemption or accepting remuneration.