Speaking at the SPAA State Technical Conference this week, the ATO’s assistant commissioner for SMSFs, Matthew Bambrick, explained the ATO undertakes compliance work focused on approved auditors, given “they’re such a key part of the system”.
Mr Bambrick said the ATO audited 150 auditors last year.
“We did give details of 339 auditors to ASIC in relation to registration issues. And we have formally referred 13 auditors to ASIC that we actually have serious concerns about,” he said.
Those auditors are aware that they have been referred to ASIC, Mr Bambrick also noted.
Speaking previously to SMSF Adviser, the Institute of Chartered Accountants Australia’s head of superannuation Liz Westover said the independence of auditors is a key focus for the ATO in its compliance activities.
“Auditors must be independent to ensure they are able to form an unbiased opinion on the compliance of the SMSF and the accuracy of the financial reports. It is an opportune time for auditors to assess their independence on each SMSF audit engagement,” Ms Westover said.
“The professional accounting bodies issued their independence guide in 2013 to assist practitioners in meeting these professional and ethical obligations,” she added.
As an accountant who uses an external, independent auditor I am very happy that minimum audit standards are required. Most clients do the right thing and follow my advice, but there are always a few smarties and then it is good to have the back-up (or threat) of an auditor to prevent them to be too smart for their own good.
Sorry Ian, I agree with Kris as well. I had a client who insisted that a couple of pictures were leased to a third party but when I asked for photographs they came back with their lounge room in the background. Whilst the vast majority will do the right thing, we need a degree of regulation to ensure that others comply as well.
I agree with Kris – one just has to be called in to claim up the mess from bad advice to an SMSF to recognise the value of good auditing. It’s very easy to loose the lot if the SMSF ‘owner’ doesn’t have a full and timely grasp on their fund, including the underlying assets. I’ve seen too many frauds – by SMSFs and on SMSfs to believe in loosening the legal requirements we currently have.
As a registered SMSF Auditor, I agree with Kris. Only this week, I spent some time discussing with a Trustee why I have lodged a contravention report for his SMSF. By the time our discussion was complete, he was happy with the outcome and now understands why it was required. SMSFs offer considerable tax concessions to taxpayers to save for their retirement. Wherever there are concessions, someone will try to misuse them. While not suggesting that Ian is one of those people, the audit process must be in place or those who do comply will be penalised because of the actions of a few.
Although I can relate to the frustration that Ian (in the previous comment) feels, I have to disagree about over regulation.
Having the option of taking control of your retirement savings via an SMSF is unique – no where in the world is this possible apart from Australia.
An audit – assuming it is independent – is essential to ensure the health of the every individual SMSF and the SMSF industry as a whole.
If you have to jump through a few hoops – so be it! It is a small price to pay for the freedoms you enjoy.
I am NOT a SMSF auditor – however as an administrator looking after many hundreds of SMSFs, I understand the value in cleaning up the less than reputable SMSF auditors that are still around.
By these actions, combined with increased scrutiny on independence, as an SMSF community we should be able to well and truly quiet the naysayers with their vested self-interests.
Some of this audit stuff is absolute garbage and over the top. It is creating a significant additional cost to operating your own SMSF, that is totally not needed. I have had to provide evidence of assets held (photos for Silver bars)even though they hold the purchase invoices and a letter from Real Estate Agent re the value of the property that is held. The property is not for sale and has been owned for 8 years. It is just another case of over regulation.