With the APESB Independence Guide now in force and applicable to any audits completed after 1 July 2021 this year, SMSFs, in some cases, have had to look for a new SMSF auditor who is able to comply with the new standards.
Speaking to SMSF Adviser, BDO partner for superannuation Shirley Schaefer said SMSF auditors are continuing to see some “teething problems” where audits have changed hands.
Ms Schaefer said while she isn’t seeing any significant problems with the funds of her new audit clients, she has picked up on some administrative issues and missing documentation in some cases.
“It doesn’t mean that anything is disastrously wrong but a fresh set of eyes does provide a little more diligence,” said Ms Schaefer.
“It might be something that a previous auditor will have known but there just needs to be documentary evidence to back it up.”
Obtaining certain types of permanent documentation for new audit clients, such as trust deeds or amendments, ATO declarations or member applications, she said, has also been a challenge in some cases.
“I’ve probably [also] raised more contravention reports around administrative type things, particularly in the months July to September,” she said.
Earlier this year, ASF Audits head of education Shelley Banton warned that SMSFs appointing a new auditor for their fund would need to be prepared to deal with different perspectives in regards to investment strategies.
“Investment strategies can be looked at in a different light depending on what the previous auditor did,” Ms Banton said.
“Once there is a change in the auditor, the first thing advisers need to consider is whether the investment strategy actually complies with Reg 4.09 in all of those key compliance areas or does it simply recur to take the legislation because, if it’s the latter, then there’s certainly some work that needs to be done,” she said.
Ms Banton recommended that SMSF professionals have a conversation with the SMSF auditor up-front rather than waiting for audit queries to come through.
Most people act first and minute later. That does not mean they are crooks or doing anything wrong. Having spent hours reviewing a share portfolio, do you think anyone needs or wants minutes on which shares were sold or bought or why?,
Similar issues & the accountants think they are doing you a favour by referring their work so expect no qualification.
I accepted a trial appointment for 4 businesses and have retained none. The quality of the work from in-house auditing has been appalling. Agree 100% – lack of documentation. Issues noted to date – no trust deeds, very few minutes, appalling income stream documentation & a lack of signed accounts. Pretty much failure to comply with most record keeping rules. Thats the basic stuff – other issues unreported breaches of in-house asset rules & loans to members. The biggest concern lack of documentation to support compliance with related party transactions especially when leasing property to related parties.
So the audit independence is working to clean this up?