ATO disclosure service to expose poor-quality audits
The ATO’s voluntary disclosure service is a potential trap for any auditors failing to meet professional standards, with trustees required to indicate if their auditor identified a particular breach in their submission, an SMSF auditor has warned.
The voluntary disclosure service, set to launch next month, has been designed for trustees with serious breaches placing the future of the SMSF at risk.
SMSF trustees who use the service, which requires a full disclosure and a proposed resolution from the trustee, will not be subject to the most serious penalties including prosecution, non-compliance and disqualification.
Speaking to SMSF Adviser, SuperAuditors director Shelley Banton said that when trustees submit a voluntary proposal to the ATO through this service the proposal must indicate whether an SMSF auditor was appointed to audit the fund, and also whether the SMSF trustees were advised of the breach.
Auditors who have failed to identify the breach and therefore advise the trustees of the breach are likely to be under close scrutiny by the ATO, Ms Banton warned.
“The ATO may look at that and follow up with those auditors who potentially haven’t found that particular breach, and go back and review their audit findings to find out why the trustees weren’t advised about that in the first place,” she said.
“If in fact the auditor was appointed and the trustees weren’t advised of the breach, surely that’s an area the ATO would be looking to address with those SMSF auditors.”
The ATO, she said, may then refer those auditors to their professional association or potentially to ASIC depending on their findings.
Ms Banton said she believes the disclosure service will be a positive outcome for trustees who decide to take advantage of the service.
“I think the ATO is on the right path to getting trustees back to being compliant,” she said.
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.