AML/CTF Rules 2025: Reporting groups for accounting

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Understanding AML/CTF Rules 2025 Part 2: Reporting groups, and what it means for accounting practices

From July 2026, Australian accounting practices will be required to comply with the AML/CTF Rules for the first time, introducing new obligations and compliance structures.

A key feature is the concept of reporting groups, which allows multiple practices to operate under a single AML/CTF Program led by a nominated entity. The idea is to reduce duplication, centralise compliance expertise and make it easier for connected or allied practices to meet their obligations.

Reporting groups for accounting practices

For accounting firms, understanding reporting groups is essential. Decisions around lead entities, shared liability, and alignment with both local and international standards will shape day-to-day operations, governance, and risk management. This guide explains how reporting groups work, their practical implications for accounting practices, and the steps firms should take to prepare for compliance.

For accountants, the key questions are:

• Should compliance be managed at firm, network, or alliance level?
• How would shared liability be handled if one office falls short?
• What does this mean when global affiliations meet local rules?

What is a reporting group?

A reporting group is a set of businesses that agree to follow one AML/CTF Program under a lead entity. There are two ways this can happen:

• Business group: Entities already linked by ownership or control, for example a large accounting firm with incorporated subsidiaries.
• Election group: Independent firms choosing to partner for compliance, for example members of a mid-tier national network.

The lead entity must be nominated in writing, have authority to set AML/CTF policy, not be controlled by another regulated entity, and be incorporated or resident in Australia.

Unique context for accountants

Accounting practices face distinct challenges:

• Varied structures: Some are incorporated companies, others partnerships or trusts. Choosing an eligible lead entity may not be straightforward.
• National networks: Mid-tier practices often operate as alliances of independents. A single Program could provide efficiency but requires alignment across diverse client bases.
• International affiliations: Global networks may have AML frameworks in place, but the Australian lead must comply with local rules, even if they differ from international standards.
• Audit, tax, and advisory: Each service line carries different risks. A single Program must account for this variation.
• Small suburban practices: Many serve SMEs with minimal compliance infrastructure. Joining a reporting group could provide systems and training they lack.

Practical examples in the accounting sector

• National franchise: A tax franchise with offices nationwide forms a business-based reporting group. The franchisor is the lead entity, setting one AML/CTF Program with shared templates and training. Franchisees gain consistency but lose some autonomy.
• Global network firm: A mid-tier audit and advisory firm within an international brand forms an election-based reporting group with its Australian affiliates. The Australian lead aligns policy nationally and with global standards.
• Local collaboration: Several suburban firms find compliance too costly to manage alone. They form an election-based reporting group, nominate one incorporated firm as lead and share training and policy infrastructure.

Operational reality

Reporting groups affect day-to-day practice, not just governance:

• The lead entity designs and maintains the AML/CTF Program for all members.
• Verification, staff due diligence, and training requirements must be standardised.
• Failures in one office expose the group.
• CDD timeframes apply group-wide:
  • Property transactions: Up to 15 calendar days or settlement, whichever is earlier.
  • Other matters: Up to 20 business days.
• Joining and leaving follow strict rules.
• Reliance requires a written agreement.
• AUSTRAC must be notified of membership changes.

Governance and liability considerations

Joining a reporting group means a firm no longer sets AML/CTF obligations in isolation. The lead entity’s Program applies across all members, creating efficiencies but also shared risks.

Lead responsibility: The lead entity’s AML/CTF Program applies to all members. This reduces duplication but removes flexibility for firms. Authority, liability and dispute processes must be clear.

Shared liability: AUSTRAC can sanction a non-compliant office, but the lead remains accountable for the Program as a whole.

Oversight: The Program must include regular reporting to the lead’s governing body and cover every member.

Staff checks and training: Group-wide standards apply to all offices. Offices cannot set lighter requirements independently.

Independent evaluation: At least every three years, the group Program must be reviewed independently, with findings reported to the lead’s governing body.

Reporting obligations: The Program must ensure accurate suspicious matter, threshold transaction and international funds transfer reporting, with safeguards against tipping-off.

Joining and leaving

• Joining: New members require the lead’s consent. If one entity in a business group joins, all related entities are automatically included.
• Leaving: If one member of a business group exits, the entire group exits. If the lead withdraws, all members must be notified and a new lead appointed within 28 days.

For accountants, mergers and de-mergers will have immediate consequences for group membership.

Practical guidance

Step 1: Map your structure
Identify all related entities and networks that could fall within a reporting group.

Step 2: Assess suitability
Weigh whether a group Program would reduce duplication or whether independence would preserve control and limit exposure.

Step 3: Identify a lead entity
Ensure it meets eligibility rules and has the operational capability, ideally a dedicated AML team.

Step 4: Update governance frameworks
Partnership or alliance agreements should spell out the lead’s authority, liability allocation and exit processes.

Step 5: Standardise workflows
Align client intake, verification and recordkeeping. Confirm systems can handle CDD deadlines and reliance requirements.

Step 6: Train staff
Training should cover AML fundamentals, reporting group rules, CDD deadlines and reliance protocols

Immediate next steps

• Franchisors: begin discussions with franchisees about reporting groups
• Independent firms: explore election groups with peers
• Global networks: review international policies for alignment with AUSTRAC’s requirements
• All firms: draft a plain-English memo for staff explaining reporting groups, delayed CDD and reliance rules.
• All firms: start considering what technology you will use to align with your chosen approach

Conclusion

Reporting groups are a central feature of the AML/CTF Rules 2025. For accounting firms, they offer efficiency and consistency but concentrate liability and governance responsibility.

The decision should be based on structure, client mix, and capability. Early preparation; mapping structures, updating agreements and aligning workflows, will position firms to meet the July 2026 deadline with confidence.