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Audit and accounting of the FX broker


On behalf of the insurer, operations with securities may be carried out by a broker, whose most important task is the correct accounting of all transactions of the client and the timely submission of reports on them. 

Benefits of outsourcing

Its functions include not only the correct bookkeeping, but also a timely response to any changes in legislation, and the ability to support the functioning of the company in an unstable economic situation. Initially book-keeping in organizations was performed independently, but gradually more and more managers are inclined to transfer the affairs to third-party organizations. This is the so-called outsourcing of accounting services — the transfer of responsibilities for accounting to a specialized organization. Its employees have the necessary know-how and experience, and have the technical equipment for the professional solution of their tasks. 


The main advantages are: 

  • Quality assurance and strict confidentiality. When the client applies to the outsourcing company, a contract is signed in which the duties of each party and the responsibility for the failure to comply with the undertaken obligations are clearly indicated. 

  • The high level of services rendered. The employees of outsourcing companies regularly undergo re-attestation and requalification, have specialized education and great experience in working with different enterprises. The competent accounting service allows to avoid disputes with inspection bodies, as well as penalties and expenses, connected with error correction. Promptness of work. Many managers believe that turning to an outside organization will reduce efficiency, because the staff of such a company will have to go into all the nuances of accounting. In practice this is not the case: the problem is solved by the whole team of specialists, who are able to conduct a rapid analysis and make a quick decision regarding those or other areas of accounting. 

  • Cost reduction. When going to an outsourcing company there is no need to hire an accountant, organize his workplace, upgrade his qualifications, pay his salary and, accordingly, taxes. It is efficient and economically justified to resort to outsourcing when accounting services are irregular.

  • Continuity of work. The outsourcing company does not go on vacation, on sick leave or on maternity leave. The bookkeeping is done continuously, the tax reports are submitted in time, and as a result, there are no difficulties with the organs of State Authorities. The economic crisis forces business owners to take a different look at existing costs and minimize tax deductions. That is why many managers resort to outsourcing. And today there is a tendency to displace regular staff from accounting services in favor of specialized outsourcing companies. 


What are the peculiarities of these operations and the accounting procedure? 


The client funds transferred to the broker for the execution of securities transactions, as well as the funds received by the broker on such transactions, must be kept in separate bank accounts, which the broker opens in the credit institution. The broker has to keep records of each client funds on the special brokerage accounts and has to report to the client.


The client funds in the special brokerage account cannot be foreclosed on the broker's liabilities. The broker is not in a position to credit his own funds to the special brokerage accounts, except in cases when he returns them to the client and/or provides him/her with a loan in the manner prescribed by the law.


The broker is not in a position to use the funds in the special brokerage account for his own benefit, if provided for in the brokerage services agreement, guaranteeing the execution of the client's instructions using these funds or their return at the client's request. The funds, the right to use which in the broker's interests has been granted by the clients, must be kept in a special brokerage account separate from the special brokerage account, which contains funds of the clients who have not granted the broker the right to use them. The funds of the clients who gave the broker the right to use them can be deposited by the broker in his own bank account.


It is important to note that the procedure of presenting reports to the client, their form, terms and other conditions are usually defined by the broker with the corresponding regulations, because the contract for brokerage services contains only the general terms of the relations between the parties, such as the general rights and obligations, tariff, etc.


It follows from the contract with the broker that all rights and obligations under the transaction arise directly with the client and not with the broker, who in this case registers the concluded transaction and controls the change of ownership. Thus, all transactions with securities and funds carried out under the contract with a broker are reflected in the books of the organization in full, as if the organization independently carries out transactions with securities. 


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