The ATO expects to engage with approximately 1000 SMSF auditors this year to ensure proper, comprehensive audits are being undertaken.
The ATO’s director for SMSF regulatory and income tax products, Nathan Burgess, said if the ATO finds a problem with an SMSF and it did not receive an auditor contravention report (ACR), that raises a red flag.
“So for example, there was a large withdrawal from the account which is a personal payment to a trustee, and that didn’t get picked up in the audit, we’d be concerned about that,” he said.
Mr Burgess also stressed that avoiding ACR lodgement will not result in a better outcome for an auditor’s client.
He said dependant on the nature of the breach, if two funds commit the same breach, the fund that has an ACR lodged will be in a better position than one that hasn’t.
“The reason being is that while both caused the breach, the SMSF with the auditor who found the breach is demonstrating to us they have the right people and the right structure around to fix this is up,” Mr Burgess said.
The ATO has previously stressed the importance of auditors continuing to submit ACRs in spite of the new trustee penalty regime, with ATO assistant commissioner for superannuation Matthew Bambrick saying ACR avoidance would create “serious” independence issues.
Nervous time to be an auditor