The ATO’s new penalty powers, which came into effect last week, will have a direct impact on SMSF auditors, one audit firm has predicted.
A recent newsletter from SuperAuditors noted the ATO will be using SMSF annual returns and auditor contravention reports (ACRs) to apply a risk-based approach to assessing SMSFs with compliance breaches.
“They have further said that the failure of an SMSF auditor to lodge an ACR will result in the same or heavier penalties for the trustees than if no ACR was lodged,” SuperAuditors stated.
“In this respect, the ATO is expecting trustees to step up and take a professional approach in their role and responsibility as a trustee.
“SMSF auditors will also be in the firing line if they are found not doing the right thing as they can be reported to ASIC and their professional bodies.”
SuperAuditors said practitioners should also be wary about referring their SMSF clients to auditors who have a reputation for being an "easy auditor", as they may face potential PI claims from trustees as a result of the new penalty regime.
Speaking previously to SMSF Adviser, Heffron’s head of customer, Meg Heffron, said the new powers will change the relationship between SMSF trustees and auditors.
“In the past, if an auditor reported a breach, generally as long as it was rectified there was no further action, whereas now there could well be,” she said.
“There is a penalty to be paid [by trustees], so auditors are under more pressure to be absolutely certain of the breach before they report it,” she added.
Ms Heffron believes auditors have to be more “conscious” of their actions, adding that the days of reporting a breach without any certainty are over.
“[Auditors] will have to be confident they are right before they report a breach because trustees are going to be more concerned that it never gets that far,” she said.
“Trustees will now be asking, ‘How come you are reporting it as a breach? Are you absolutely sure?’ and the auditor who hasn’t done [their] homework will not be able to say, ‘Yes, I am absolutely sure’.”
SUBSCRIBE TO THE SMSF ADVISER BULLETIN
- 20 Sep 2017‘Execution only’ approach with SMSFs high-risk for accountantsBy Miranda Brownlee
- 20 Sep 2017Super saver scheme to benefit wealthy, says consultantBy Miranda Brownlee
- 19 Sep 2017Government rules out tax cut for family trustsBy Lara Bullock
- 19 Sep 2017Government likely to review licensing regime, consultant predictsBy Miranda Brownlee
- 18 Sep 2017Sluggish wage growth ‘undermining super savings’By Lucy Dean
- 18 Sep 2017SMSFs facing weaker investment outlook, report revealsBy Staff Reporter
- view all
- ‘Execution only’ approach with SMSFs high-risk for accountants
An industry lawyer has warned the unlicensed accounting firms recently contacted by ASIC that justifying the provision of services without a...read more
- Super saver scheme to benefit wealthy, says consultant
One consultant expects that wealthy Australians will gain the most advantage from the First Home Super Saver Scheme while the overall take-u...read more
- Government likely to review licensing regime, consultant predicts
Given the ongoing cost and complexity of the licensing regime for accountants, one consultant believes the government may have to review and...read more
- view all