Mandatory audits for IATA accredited travel agents
With effect from June 2013, the International Air Transport Association (IATA) has introduced a number of stringent new measures to monitor the financial stability of accredited travel agents. The new regulations were considered necessary, due to increased losses suffered by airlines resulting from agency failures.
The key changes centre on the bonding and audit requirements, including:
- New financial criteria, with net equity and profitability tests. Failure to pass the tests will initiate a requirement for bonding.
- New bonding requirement for 2 years for newly accredited agencies
- New bonding triggers, including “single instance” defaults
- Revised bonding calculations, leading to higher bond requirements
- Mandatory annual audits for all accredited agencies, regardless of size.
Given the potentially severe implications of the new regulations, it is imperative that agencies review their financial and reporting procedures, assess their cashflow requirements and consider re-structuring if required to meet the new tests. Any agency which does not currently audit their annual accounts will be required to carry this out and appoint an authorised independent auditor, if the service cannot be provided by their existing accountants. There is now no minimum threshold for mandatory audits and all accredited agents are obliged to comply.
With specialist sector expertise and as registered auditors, taylorcocks can provide an expert and cost-effective service. Whether you require an objective review of your financial status and processes, re-structuring advice, preparation of your annual accounts or audit services, contact us for an initial discussion.