Reporting Groups for Accounting Practices 2026

A designated business group is the former arrangement replaced by reporting groups for sharing anti-money laundering and counter-terrorism financing (AML/CTF) functions. For your practice’s related entities, identify the eligible group, appoint its lead entity and record who performs each duty.

Reporting Groups Replace Designated Business Groups

A reporting group brings eligible members under a lead entity with responsibility for group-wide AML/CTF arrangements. The Australian Transaction Reports and Analysis Centre (AUSTRAC) explains the replacement in its reporting-group guidance.

Your practice’s reporting group concerns the entities providing or supporting designated services. A client’s tax-consolidated group concerns a different legal purpose. An entity chart helps identify relationships, but it does not establish that your practice meets the reporting-group conditions. Sharing a brand, office or onboarding system does not establish membership either.

Start with the legal entities that contract with clients and the designated services each provides. Include entities that perform AML/CTF tasks for them. Then identify control relationships before choosing a group route.

Determine Which Group Arrangement Applies

Use the control-based route where your business group meets the legal conditions. Use the elective route where eligible members agree to form a group through written elections.

Compare the Two Routes

Control includes the statutory tests for voting power, shareholdings and decisions about financial and operating policies. Assess the actual relationships under sections 10A and 11 of the Act.

Apply the Rules to a Small Practice

Consider this fictional practice. An Australian holding company controls a client-services company and an administration company. The client-services company provides designated company-formation services to external clients. The administration company employs the staff who carry out client checks.

Assume these are all the entities within the control relationship. All three belong in the business-group assessment. The administration company’s lack of external designated services does not remove it from that assessment. The holding company can be the lead if it meets the appointment and policy-authority requirements.

A separately owned practice shares their office and brand but has no control relationship with them. It remains outside this business group. An elective arrangement requires its own eligibility assessment and written elections, including all members of any business group joining it.

Appoint the Lead Entity and Record Membership

Choose an eligible lead entity and retain the written appointment or agreement before relying on members to discharge one another’s obligations.

For both routes, the lead must have the required Australian connection. It cannot be controlled by another group member that provides designated services. The connection can be Australian incorporation, registered foreign-company status, a trust with an Australian-resident trustee or Australian residence for another eligible person.

The business-group lead needs the capability and authority to develop and maintain the members’ AML/CTF policies. An elective lead needs the agreed capacity to determine outcomes of other members’ policy decisions. Where an elective group includes business-group members, its lead must come from one of those business groups. AUSTRAC’s formation guidance explains these conditions.

1. Record the membership basis. Keep the ownership evidence and designated-service assessment against each legal entity. For an elective group, retain the written elections and any consent needed to join an existing group.
2. Record the lead’s eligibility. Keep its Australian connection, evidence of policy authority and the written appointment or members’ agreement. Record when the appointment takes effect.
3. Complete the enrolment records. The lead and reporting-entity members must enrol. The lead supplies reporting members’ legal names and AUSTRAC account numbers. Those members identify the lead in their own records.
4. Reconcile the records. Compare the submitted enrolment details with the membership register and resolve mismatched legal names or account numbers.

A non-reporting member can perform assigned duties without providing designated services itself. Being appointed lead changes that position: the Act treats the lead as a reporting entity, including where it previously provided no designated services.

Follow the separate AUSTRAC enrolment procedure for each required application or amendment. Membership documentation and enrolment records perform different jobs, so retain both.

Allocate Duties Across the Practice’s Entities

Assign each AML/CTF task to a named entity and record which members it performs that task for. The lead’s policies must identify these arrangements and provide access to the supporting records.

Adapt the Responsibility Table

This table is a starting allocation for the fictional practice. Replace each entity role with the responsible legal entity and identify the staff member who performs the work.

The AML/CTF program for accountants covers the risk assessment and policies behind that allocation. Client-level KYC for accountants covers the checks themselves.

Delegation does not remove the reporting member’s responsibility for compliance. The lead also carries group-wide accountability. A member’s breach of a civil penalty provision can be treated as a breach by the lead as well. AUSTRAC’s obligations guidance explains that shared exposure.

The group must have a lead in place for another member to discharge an obligation. A non-reporting member doing this work must apply the relevant personnel due diligence and training standards. These conditions appear in Rules 2-3 and 2-4.

Share Client Information Under the Applicable Rules

Share information for a defined AML/CTF purpose, with authorised recipients and access limited to the work they perform. Record the reason for the disclosure and the evidence each responsible entity can retrieve.

For example, the administration company can make its client-check record available to the client-services company under the documented assignment. Identify the client, the check performed, its result and the staff member who made the risk decision. Restrict access to staff who need that information.

Information about a suspicious matter needs a separate disclosure assessment. AUSTRAC’s tipping-off guidance prohibits relevant disclosures that would or could reasonably be expected to prejudice an investigation. Group membership does not make every disclosure safe. Apply confidentiality rules and assess who could receive the information through onward sharing.

Keep the disclosure record in a restricted file. It can identify the purpose, legal basis, recipient, information released and conditions on further use. Restrict the record itself where it reveals a suspicion.

AML information sharing does not give general permission to distribute the client’s tax records. Apply the OAIC’s privacy guidance for reporting entities, professional confidentiality and any required client authority. TFN handling has its own legal restrictions under the Privacy TFN Rule. Client consent alone does not authorise a prohibited TFN use.

Tax Genie records identity checks, screening results and the practice’s risk determination with its reasoning and next review date. Use those records as evidence for the allocated client-check task. Your practice decides whether the proposed information sharing meets its legal duties and group policies.

Handle a Former Group or a Membership Change

Reassess the group when its membership or control relationships change, and update the written arrangement alongside the regulator records.

Take a fictional former designated business group comprising the holding company and its two controlled companies. Its first step is to confirm the full control relationship, including any entities missing from the former list. It then records the eligible lead’s written appointment and replaces the former joint arrangements with policies meeting the reporting-group requirements.

The old group name and joint program are not proof that the new conditions are met. A former member outside a reporting group needs its own separate AML/CTF program and cannot rely on the former joint program.

Apply the Change Rules

For either group route, missing the permitted lead-entity period means the reporting group ceases to exist. Allocate separate obligations before that gap leaves a member relying on another entity without the required arrangement.

AUSTRAC’s reporting-group enrolment guide explains the online updates for joining, leaving and replacing a lead. Coordinate the submissions: the guide says the online group is formed once the lead and member entities submit their updated details.

Close the change only when the membership register matches the written notices and appointments, and affected entities have submitted their required updates. Confirm that each reporting member can access its current policies and compliance records.