Lodging the SMSF annual return prior to the audit report being completed is one of the key reasons the ATO will be contacting advisers, said SuperAuditors director Shelley Banton.
“This is an unacceptable practice and a red flag to the ATO to contact the SMSF adviser. Be aware that SMSF auditors are also being urged to report this issue in Section G of the Auditor Contravention Report,” she said.
Tax agents who apply “undue pressure” to SMSF auditors to avoid reporting contraventions will also be on the ATO’s radar.
“They are interested in the percentage of ACRs lodged by the SMSF auditor as compared to all auditors (approximately two per cent). Where there are no contraventions lodged, the ATO will investigate,” Ms Banton said.
Misuse of auditor details is also on the ATO’s hit list.
“The ATO is currently investigating 20 cases where the tax agent has charged the trustee for an audit that never occurred. The ATO has confirmed that the consequences will be serious when this happens,” she said.
Ms Banton also reiterated the ATO’s ongoing concerns about tax agent and auditor independence.
“Currently, there are 150 tax agents, who are also SMSF auditors, being investigated for independence issues by the ATO,” Ms Banton said.
“This is their biggest area of concern and they are testing the integrity and independence of the SMSF system by looking at fund name vs the names of members; tax agent name vs audit firm name; number of contraventions and information on the firm and individual tax affairs,” she added.