Does general tax return preparation trigger AUSTRAC obligations?

No. General tax return preparation, BAS lodgement, and standard bookkeeping are not designated services under the AML/CTF Act 2006. However, if your firm also provides trust formation, company structuring, or manages client funds, those specific services are regulated regardless of whether tax work is your primary service.

Does forming one company per year for a client trigger Tranche 2?

Yes. Company and trust formation is a designated service regardless of volume or frequency. Even a single company incorporation or trust establishment on behalf of a client in a year makes your practice a reporting entity for that service. The trigger is the nature of the service, not how often it occurs.

What accounting services are NOT designated services under Tranche 2?

General tax return preparation, income tax advice, BAS preparation, standard bookkeeping, financial statement preparation, and audit services are not designated services. If your practice provides only these services and does not manage client funds or form legal structures, you are not a Tranche 2 reporting entity. Use AUSTRAC's eligibility checker at austrac.gov.au to confirm your specific situation.

Who can be the AML/CTF Compliance Officer for an accounting firm?

The Compliance Officer must be a senior person within the practice — for small and sole-practitioner firms, the principal accountant can hold the role. They must be appointed in writing, have authority to access all client files and records, and meet AUSTRAC's fit and proper standard. The appointment and their responsibilities must be formally documented.

What must an accounting firm's AML/CTF program cover?

Your written program must address a risk management framework — your ML/TF risk assessment covering client types, services, delivery channels, and jurisdictions — and customer due diligence procedures — your customer identification and verification procedures. For accountants, the risk assessment must specifically address risks associated with company and trust formation, nominee services, and client fund management.

What CDD must accountants conduct on clients?

Before providing a designated service, you must collect and verify each client's identity. For individuals: full name, date of birth, and address verified by government-issued photo ID. For companies: ACN, registered address, directors, and beneficial owners (natural persons owning or controlling 25% or more). For trusts: trust deed, trustee identity, appointor, and beneficial ownership traced to natural persons.

What records must accounting practices keep for AUSTRAC compliance?

Different AML/CTF record categories have different retention rules and statutory triggers. Program records, CDD records, transaction records, reporting records and training or program-compliance records must be retained for their applicable statutory periods. Records must be stored securely and be retrievable within timeframes specified in any AUSTRAC request.

Does Tranche 2 apply to BAS agents as well as registered tax agents?

BAS agents whose services are limited to BAS preparation and lodgement are not providing designated services. However, if a BAS agent also manages client funds, operates trust accounts on behalf of clients, or assists with company or trust formations, those services are regulated. The obligation attaches to the service provided, not the registration type. Use AUSTRAC's eligibility checker at austrac.gov.au to confirm.

What if I only occasionally form a company or trust for a client?

The frequency of providing a designated service does not affect whether you are a reporting entity. Even one company incorporation or trust establishment on behalf of a client in a calendar year triggers AML/CTF obligations for that service. You must enrol with AUSTRAC, implement an AML/CTF program, and conduct CDD for that client.

Do I need separate CDD for each engagement or once per client?

CDD must be completed before providing a designated service, but you do not need to re-collect documents for each subsequent engagement with the same client if their circumstances have not changed and your previous verification remains current. Your AML/CTF program must specify your ongoing CDD review procedures — including triggers for re-verification such as material changes to client structure, unusual transactions, or changes in risk profile.

Can I rely on CDD conducted by another Tranche 2 entity such as a law firm?

Yes. Reliance arrangements are permitted under the AML/CTF Act. If a law firm has already verified a mutual client's identity, you may rely on that CDD under a written reliance arrangement. The relying party retains legal responsibility for the adequacy of the CDD — so you must be satisfied the other entity's verification meets the required standard before relying on it.

What is beneficial ownership and how do I identify it for a discretionary trust?

Beneficial ownership means identifying the natural persons who ultimately own or control the entity. For a discretionary trust, this includes the trustee (and if corporate, its directors and shareholders), the settlor, the appointor, and any named or identifiable beneficiaries. Where no individual beneficiary owns 25% or more, you must identify the class of beneficiaries and the person exercising effective control — typically the appointor.

Do I need to re-verify long-standing clients I have worked with for many years?

AUSTRAC's guidance requires that all customers be identified and verified before designated services are provided. For existing clients with no prior formal verification, you must complete CDD before continuing to provide regulated services after 1 July 2026. For clients previously verified under a robust process with adequate records, your AML/CTF program must specify how you treat existing client files and must ensure documentation is sufficient.

What is a PEP and what additional steps are required when dealing with one?

A Politically Exposed Person (PEP) is an individual who holds or has held a prominent public position — including government ministers, senior military or judicial officers, and their close family members and associates. Engaging a PEP as a client requires enhanced CDD: verifying the source of funds and source of wealth, applying senior management approval before engaging, and conducting more frequent periodic reviews of the relationship.

Does Tranche 2 apply if I work as a contractor inside a larger accounting firm?

Tranche 2 obligations apply to the reporting entity — the firm that provides the designated service to clients. A contractor working within a compliant firm is generally covered by that firm's AML/CTF program. However, if you operate independently under your own ABN and provide designated services to clients directly, you are personally a reporting entity and must enrol and comply in your own right.

How often must I review my AML/CTF program?

Your AML/CTF program and ML/TF risk assessment must be reviewed when specified events occur and, in any event, at least once every 3 years, subject to the applicable statutory framework. Program updates must be documented and approved in accordance with the applicable requirements.

How often must accountants get an independent evaluation of their AML/CTF program?

At least once every 3 years, and more often if appropriate to the size and complexity of your practice. This is a separate, mandatory requirement under the AML/CTF Act — distinct from the annual internal review above. The independent evaluation must assess: your ML/TF risk assessment against the Act and Rules, the design of your AML/CTF policies, your actual compliance with those policies, and whether you're appropriately identifying, assessing, and mitigating ML/TF risk. Findings go in a written report to your governing body and any senior manager responsible for program approvals.

What is the AUSTRAC Accounting Program Starter Kit and is it enough?

AUSTRAC has released a sector-specific Program Starter Kit for accountants that covers the basic structure of a compliant program. It is a useful starting point but is generic — it does not reflect your firm's specific client base, risk profile, services mix, or compliance officer details. AUSTRAC's own guidance states that programs must be tailored to your business. For more context on what a customised program requires, see our full AUSTRAC Tranche 2 guide.

Does Klyvon include sanctions screening?

Targeted financial sanctions screening is now part of your AML/CTF program obligation under the AML/CTF Rules 2025 — not a separate exercise. Klyvon's generated program includes the required policy controls for targeted financial sanctions. You will still need to screen clients against the DFAT Consolidated List as part of your CDD workflow. Klyvon does not run live screening checks, but your program documents exactly when and how to do it.

I started providing a designated service after 1 July 2026 — do I still need to enrol by 29 July 2026?

No. The 29 July 2026 date only ever applied to businesses that were already providing a designated service on 1 July 2026, and that date has passed. If you started after 1 July, you have 28 days from the date you started to enrol with AUSTRAC — this rule applies on an ongoing basis, not just around the Tranche 2 rollout. Full explanation and worked examples: https://www.klyvon.com.au/austrac-enrolment-28-day-rule.

Updated August 2026

Field Guide · Accountants & Tax Agents

AUSTRAC AML/CTF requirements for accountants

General tax and BAS work sits outside AUSTRAC entirely. Managing client funds, forming a company, or acting as nominee director doesn't — and it only takes one of those, once, to make your practice a reporting entity.

Generate my compliance documents →See the checklist

8
Steps to compliance: 29 Jul
Enrolment deadline (passed): 3 days
SMR lodgement: Varies
Retention periods

Not every accounting practice is automatically regulated by AUSTRAC. Coverage depends on whether the practice provides designated services: general tax return preparation, BAS lodgement and standard bookkeeping are not designated services, while services such as managing client funds or forming companies or trusts may bring a practice into scope. AML/CTF obligations have been in effect since 1 July 2026.

⚠ Enrolment deadline passed 29 July 2026 · Practices not yet enrolled are non-compliant nowaustrac.gov.au ↗

In this guide

What AUSTRAC requires, step by step Does my practice need to comply?Red flags accountants must watch for What Klyvon generates for you Frequently asked questions Get compliant with Klyvon

I. What AUSTRAC Requires

Eight steps every in-scope practice must have completed

Klyvon generates the documents this list requires automatically — enrolment and training are the two steps that stay yours to action.

Set up the program

Enrol with AUSTRAC now if not enrolled

Register at online.austrac.gov.au using your ABN. Complete the Business Profile Form declaring your designated services, Compliance Officer details, and business structure. Enrolment opened 31 March 2026.

Appoint a Compliance Officer in writing

The Compliance Officer must be a senior person within the practice — for sole practitioners, this is you. They must have authority to access all client files and records and meet AUSTRAC's fit and proper standard.

Build your AML/CTF program

Your written program must cover a risk management framework and CDD procedures, with the risk assessment specifically addressing company and trust formation, nominee services, and client fund management.

Apply CDD before providing any designated service

Individuals: name, DOB, address verified by photo ID. Companies: ACN, directors, beneficial owners (25%+ owners). Trusts: trust deed, trustee identity, appointor, beneficial ownership traced to natural persons.

Run it day to day

Watch for accountant-specific red flags

AUSTRAC published risk insights for accountants in March 2026 — unexplained entity formations, nominee arrangements, and structuring. See below for the full list.

Submit Suspicious Matter Reports when suspicion arises

3 days / 24 hrs

Terrorism financing suspicions within 24 hours, all other matters within 3 business days. Document every assessment, including decisions not to file. Section 123 concerns disclosure of covered information where the disclosure would or could reasonably be expected to prejudice an investigation, subject to applicable statutory exceptions.

Keep required records

Different AML/CTF record categories have different retention rules and statutory triggers. Retain program, CDD, transaction, reporting and training or program-compliance records for their applicable statutory periods, stored securely and retrievable on AUSTRAC request.

Schedule your independent evaluation

At least once every 3 years, arrange an independent evaluation covering your risk assessment, policy design, actual compliance, and risk mitigation effectiveness — distinct from your annual internal review.

II. Two Lists, One Practice

Does my accounting practice need to comply with AUSTRAC?

One list keeps you out. The other pulls you in — and only one service on it has to apply.

What makes an accounting practice a reporting entity

Designated services — in scope

Company & trust formation
Nominee director arrangements
Managing client funds or assets
Registered office services
Acting on real estate transactions

Not designated — out of scope

Tax return preparation
Bookkeeping
Financial statement preparation
BAS lodgement
Audit services

One designated service is enough. A practice that only prepares tax returns and does the books stays outside Tranche 2 — the moment it also forms a trust or holds client funds, the whole practice becomes a reporting entity.

Rule of thumbIt’s the service, not the volume.

very year, a handful of practices ask the same question a different way — does doing mostly tax and BAS work mean AUSTRAC doesn’t apply to us? It doesn’t work that way. The obligation attaches to the service, not the practice as a whole. A firm that forms one company for one client in a year is a reporting entity for that service, full stop — the frequency, and the proportion of the practice’s total revenue it represents, make no difference.

That’s what trips up practices who think of themselves as “just tax agents” — a firm can be entirely out of scope for its core tax practice and fully in scope for the trust account it also administers, at the same time. Managing or controlling client money, securities, or other assets is a designated service, including operating trust accounts on behalf of clients and controlling SMSF assets where the accountant exercises discretion. Funds held solely as payment for your own services are exempt — using a trust account as a substitute banking facility for clients is not.

“Company and trust formation is a designated service regardless of volume or frequency — even a single incorporation in a year makes your practice a reporting entity for that service.”
— AML/CTF Act 2006, designated services

III. What AUSTRAC Watches For

Eight patterns published for accountants specifically

AUSTRAC's Risk Insights for Accountants, published March 2026. None of these alone proves anything — what matters is whether, taken together, a reasonable person in your position would start to wonder.

Entity formations with no commercial purpose

Clients requesting company or trust formation where no genuine business activity can be identified — particularly if the client is vague about the entity's purpose.

Nominee arrangements with no genuine connection

A named director or shareholder with no knowledge of the business and no apparent reason to be involved — a structure designed to obscure the true controller.

Funds from FATF grey or black list jurisdictions

Clients managing or receiving funds from high-risk countries carry elevated ML risk and must trigger enhanced CDD.

Layering through multi-layered structures

Chains of holding companies or back-to-back trusts across jurisdictions that make it hard to identify the ultimate beneficial owner.

Structuring below the $10,000 TTR threshold

Clients deliberately splitting payments to stay under reporting thresholds, or asking whether a payment would trigger a report — a criminal offence.

Refusal to provide source of funds

Unusual resistance to source of funds or source of wealth information, particularly for large movements or high-value formations.

Rapid movement through trust accounts

Large sums entering and leaving a trust account at unusually high velocity with no corresponding business transactions to explain it.

Multiple entities in rapid succession

Instructions to establish several companies or trusts in quick succession with no coherent business explanation for needing separate entities.

AUSTRAC: Risk insights and indicators of suspicious activity for accountants ↗

IV. What You Get

Four documents, built for your specific practice

Not a generic template — your name, your compliance officer, your services, generated for review.

AML/CTF Program Document

Your firm-specific compliance program built to current law. Covers client fund management risks, company and trust formation procedures, and nominee service red flags.

Client Due Diligence Forms

CDD procedures for individual, company, trust, and SMSF clients with accountant-specific enhanced CDD triggers, including source of funds requirements.

Compliance Officer Letter

A record of the practice's compliance-officer designation. The practice remains responsible for ensuring the designated individual meets the applicable requirements.

SMR Assistant

When suspicion arises, you have 3 business days to file. Klyvon prepares an SMR draft from the information entered for review before submission through AUSTRAC Online.

V. Reference

Common questions from accountants

VI. How Klyvon Helps

Compliance doesn’t end at enrolment — Klyvon runs alongside your practice

Your program, risk assessment, and CDD records are generated for review. Then Klyvon keeps working — tracking staff training and review dates, drafting SMRs, and answering the questions that come up between reviews.

Risk assessment, built to your practice

A documented ML/TF risk assessment across your services and delivery channels — reflecting which of your specific services are designated, not a generic template.

Staff training + compliance calendar

Completion certificates generated automatically and retained for the applicable statutory period. Your annual review, ACR, and CDD expiry dates tracked and surfaced before they become a contravention.

SMR drafting when suspicion arises

Prepare an SMR draft from the information entered for review before submission through AUSTRAC Online.

Answers instead of pointing you at a PDF

Ask a plain question about a real client situation — a trust with an overseas trustee, a client who won't explain a company formation.

Get started free →

From $299/month · free to start · cancel anytime

Primary sources

Last updated 20 August 2026 · Klyvon Compliance Team

Related resources

AML/CTF Compliance for Accountants in Australia

Detailed national compliance overview

What is an AML/CTF Program?

Plain English explainer

How to Submit an SMR to AUSTRAC

The 3-day and 24-hour deadlines

AML/CTF for Jewellers

Tranche 2 obligations for precious metals dealers

AML/CTF for Conveyancers

What conveyancers need to have in place now

AUSTRAC Penalty Register

Every enforcement action since 2006

All resources

Every guide, sector explainer and tool