Fee pressures can be a significant distraction in the ‘battle’ to get audits done, Super Sphere director, Belinda Aisbett, told SMSF Adviser.
Ms Aisbett believes auditors bowing to market pressures at a time when more clients are being penalised or falling foul of the regulator open up the profession to increased risk of litigation.
“I think there is just going to be an increasing trend of litigation against auditors and that’s something I think auditors should really start focusing on in terms of the work they do and the procedures they undertake,” she said.
“There is a lot of offshoring and outsourcing. There is just simply a lot of people not doing a good job and charging a really low fee. Yet auditors that do a decent job have got to compete with all of that.”
Cheap SMSF audits will be the subject of the ATO’s compliance activity this financial year, as reported late last month.
In particular, SMSF auditors who promise a guaranteed low fixed fee, regardless of the complexity of the fund, and a guaranteed short turnaround time, will raise red flags with the ATO.
I totally agree with this article. Accountants are constantly pushing for lower fees. Honest auditors continue to audit funds and like myself prefer to write off a large chunk of our fees, rather than compromise audit quality and integrity. There is a point however when enough is enough! Perhaps there should be a minimum fee set out by the regulator. Hopefully those auditors that outsource and compromise the profession will soon be eradicated.
Hi Eric,
Well said, I agree that standards need to be maintained, and that in doing that litigation risk should be managed.
I fully agree with this article. As SMSF auditors, we cannot compromise our standards. Yes, we will lose clients to the low cost, fixed fee set, but we must accept that and maintain our standards. I believe that in the longer term, those of us who do maintain quality over price will survive. I also suspect that the accountants who choose the low cost audit option may also be the accountants who are offering the low cost, low quality option to clients. A lose/lose for those trustees. It really is a case of you do get what you pay for.