As SMSF Adviser reported mid last year, the ATO conducted the trial with 40 auditors to cross check the funds a particular SMSF auditor said they were auditing against the funds a tax agent said they were auditing, explained Shirley Schaefer, superannuation partner with accounting and advisory network BDO.
Approximately 50 per cent of the auditors reported being supplied with inaccurate information about the audits they were undertaking.
“At worst, no audit has been done at all and people are doing the wrong thing completely; at best, it’s a timing issue,” Ms Schaefer told SMSF Adviser.
“But the problem is… for the tax agent, they’re lodging a tax return with false and misleading information on it – it’s actually reasonably serious, even at best if it’s a timing issue.
“I do think the ATO will start looking at the tax agents more. That’s why they did that trial with the auditors about lodgements, so that will be an area they will focus some energy and resources on,” she said.
Ms Schaefer noted the regulators’ focus on the SMSF auditing process has been intense in recent months, citing the disqualification of three SMSF auditors within the space of one week late last year.
“ASIC don’t disqualify for no reason, so it’s not like you’re being disqualified for not dotting an ‘i’ and crossing a ‘t’ – it has to be fairly serious,” she said.
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AS mentioned by Shirley, this is a major issue, not only for the ATO, but also for Registered SMSF auditors. Because of privacy legislation, we are not able to obtain any information that has been reported to the ATO. I have been using the eSat software to report all audits completed over he past 2 – 3 years, however, I believe that report does not go far enough, being voluntary and only advising that the audit has been completed. In addition to the audit complete report becoming compulsory, I believe it should be expanded to include the date the audit was signed and whether the audit was qualified. The same questions that are on the Annual return should be on this report, to allow the ATO to reconcile fully.