The actions arose following ASIC concerns about failures to meet requirements including independence standards and auditing standards, or failing to comply with further conditions on the approved SMSF auditor’s registration.
ASIC disqualified Darryl Iseppi of Queensland and Alan Bentwich of NSW from being SMSF auditors. Mr Iseppi was disqualified for significant auditor independence breaches and deficiencies in auditing the acquisition of shares, borrowings, valuation of assets, compliance with in-house asset requirements and regarding a non-commutable life pension.
Mr Bentwitch was disqualified for failing to comply with a condition to have peer reviews of three of his audits, which was imposed following a past referral from the ATO.
ASIC also imposed conditions on Richard Hennessy of NSW for deficiencies in maintaining auditor independence and in audit work, including auditing the ownership and valuation of fund assets and ensuring compliance with legislative borrowing requirements.
The conditions imposed included having audits reviewed by another SMSF auditor, not auditing funds where there are independence threats irrespective of the safeguards, completing specified courses in ethics and auditing, and providing his professional association with a copy of the conditions.
Information about these three auditors was referred to ASIC by the ATO under section 128P of the SIS Act.
So, two and a half more sub-standard SMSF auditors brought to book. A good thing, I guess but still leaves the gap problem. The SMSF audit industry is rife with low cost factory operators out pricing value add type SMSF audit services. Bottom line most SMSF trustees do not value the audit process or care who their SMSF auditor is. Accountants tap into this apathy by appointing a preferred auditor, often driven by issues such as cross referrals or someone they know and like rather than any refence to the professionalism and independence. Finally, onerous rules and extended regulations have created an environment where SMSF auditors, charging a mere $330, are far more exposed to an SMSF’s affairs than a tax agent or financial planner lifting far large sum from their client’s wallets. The overall result is the rise of the factory SMSF auditor. Thick skinned and willing to tolerate risk these auditors are now the backbone of the industry. Cannot say I have a problem with it but highlights what the purpose of an SMSF audit is.
When are Accountants going to experience a Royal Commission?
Ha Ha !! Perhaps ASIC should perform a ‘look back’ on auditors as well……