The ATO has announced it is investigating a number of cases involving the misuse of auditor numbers where tax practitioners have potentially “charged the trustee for an audit that never occurred”.
Speaking at a Chartered Accountants Australia and New Zealand conference in Sydney, ATO director of superannuation Howard Dickinson said there has been a “suspicious amount of activity” where individuals have claimed an auditor has conducted an audit when they in fact have not.
Mr Dickinson said the ATO is currently investigating a number of these cases and has already taken action on 15 complaints.
“It’s actually gone up to 20 [complaints] this week, I’ve had five more people contact me this week,” he added.
In all of the cases investigated by the ATO so far, the auditor numbers were in fact misused, according to Mr Dickinson.
“In all of those cases it was the tax agent who appears to have misled both the trustee and ourselves, and indeed charged the trustee for an audit that never occurred,” he said.
“We are looking at what we’re going to do about those players when we find that," he said. "When we find it and when we confirm that, we’re going to be very serious about the action we take.”
Mr Dickinson said accountants and trustees should be aware that the ATO is becoming “better at matching what has happened compared to what has been reported to have happened”.
“It’s critical that none of your clients fall foul of any of these things because if we find this is this case, it’s truly a breach of regulatory compliance - it’s a fraudulently misleading statement.
“The penalties, options and treatments are very wide, and we’ll be looking to apply them.”
Mr Dickinson noted that the ATO will also be engaging with larger scale auditors.
“We’re starting to realise that we’ve got a pool of auditors that audit over a thousand funds,” he said.
“If you think about the amount of funds that those auditors audit and the value of those funds, the impact of one of those auditors being good or bad is significant for the whole of the system.”
The ATO will be commencing “a very different process of looking at these [auditors]”, Mr Dickinson said, adding that it will continue to look at tax minimisation in terms of “inappropriate activities to try and build the amount of money and assets invested into an SMSF”.
Dividend washing and the claiming of overseas conference costs from the fund, he said, are some of the specific issues under examination.
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