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A Detailed Guide to Client Identity Verification for Accountants

Client Identity Verification for Tax Accountants

With the Tax Practitioners Board (TPB) setting stringent identity verification requirements, it’s imperative for accountants to have a robust process in place. This guide provides a detailed step-by-step manual process to ensure compliance while maintaining the trust and confidence of clients.

1. Client Onboarding:

Inform new clients about the TPB’s identity verification requirements. Provide them with a list of acceptable documents for verification, such as:

  • Primary photographic identification: Driver’s license, passport.
  • Primary non-photographic identification: Birth certificate.
  • Secondary identification: Utility bill, ATO notice.

Reference: TPB Guidelines on Proof of Identity.

2. Document Collection:

Request necessary documents from clients. For unconventional cases, like minors or refugees, have an alternative list ready, such as letters from school principals or refugee documentation.

3. Document Verification:

Inspect documents physically, check photos, and ensure consistency across details. Cross-reference with the TPB’s official guidelines to ensure all documents meet the required standards.

4. Document Storage:

Make a contemporaneous record of the verification. Store records securely, ensuring:

  • Encryption of electronic records.
  • Restricted access to authorized personnel only.
  • Regular backups of electronic data.
  • Physical copies are kept in a locked, fireproof cabinet.

Reference: Australian Privacy Principles guidelines.

5. Periodic Re-evaluation:

Decide on a re-evaluation frequency for established clients. A common timeline is annually, but this can vary based on the client’s circumstances. Maintain records of your assessments.

6. Follow-up:

Address discrepancies, obtain additional documents if needed, and set reminders for ongoing clients. Use tools like Google Calendar or Outlook Calendar for setting reminders.

7. Document Deletion:

Keep records of the POI checks for a minimum of five years after engagement ceases, then securely delete or destroy them. Use secure deletion methods for electronic records and shredding for physical copies.

8. Client Education & Feedback:

Educate clients about the importance of identity verification to protect against fraud. Use feedback forms or tools like SurveyMonkey to gather client feedback and make improvements.

9. Stay Updated:

Regularly check for updates in TPB’s requirements and update processes accordingly. Subscribe to the TPB’s news and events for the latest updates.

10. Training & Compliance:

Train all staff members on the identity verification process using internal workshops or online courses. Periodically review for compliance using internal audits or third-party services

Automated Identity Checking

If a manual process sounds too much, you might consider an automated solution like Identity Check. Learn more about how it works for Accountants here, or read the cost-benefit analysis here.

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