ATO assistant commissioner Kasey Macfarlane said if an SMSF trustee decides to interact with the ATO’s early engagement and voluntary disclosure service, as part of the audit engagement, the auditor is still required to report any audit contraventions through the audit contravention reporting (ACR) process.
“At the same time, they might also encourage the trustee to engage with the ATO to put in place a plan to resolve that through our early engagement and voluntary disclosure service,” said Ms Macfarlane.
“The thing that I want to highlight is that even though the trustee has made an early engagement and a voluntary disclosure, that doesn’t obviate the auditors’ need to report any contraventions to us through the ACR.”
SMSF Association head of technical Peter Hogan said in cases where trustees and advisers discuss certain strategies with an auditor, auditors can be uncertain of whether this needs to be reported to the ATO.
Mr Hogan said while this might fall outside of the audit process, SMSF auditors may want to consider reporting this to the ATO outside of an ACR.
“That’s an example of something they’ve become aware of outside the audit process, but clearly the legislation says that they [must report] not only things that have already happened, but something that might happen in the future that gives them some concern,” he explained.
Currently, the amount of concerns reported to the ATO outside of the ACR process by SMSF auditors is extremely limited, said Ms Macfarlane.
She also reminded auditors that where they have formed an opinion that there’s a reportable contravention, then they do need to report that to the ATO, including cases where their engagement as an auditor has been terminated early.
“Sometimes we see circumstances where a fund engages an auditor, and the auditor detects some issues in the fund, and indicates that they will be reporting something and suddenly that auditor may find that their services are no longer required,” she said.
“In that particular case the SMSF auditor is still obligated to report those concerns to us, so they can do that through an auditor contravention report still – just to let us know about that.”