Draft legislation released yesterday reveals that under the proposed fee-for-service model for ASIC, SMSF auditors will have to pay a one-off registration fee of $1,927, up from $107.
The new fees are a drop from the previously proposed $3,429 amount during the government’s first consultation period late last year.
Approved SMSF auditors applying to exit the sector will be hit with a deregistration fee of $899.
The Institute of Public Accountants (IPA) has hit back at the revised fee, believing it will continue to deter new entrants into the sector.
“It’s in the right direction at least and it is subject to further consultation and we’ll be arguing the same points that it is still a heck of a rise,” said IPA general manager of technical policy, Tony Greco.
“[The government] told us that the initial fee for SMSF auditor registration will be coming down to a lesser figure – we say that’s a step in the right direction but we still think given the number of auditors that are out there, we don’t want less auditors.
“There’s already a concentration of those services amongst large firms, we don’t want that concentration- we don’t want more barriers to entry for new auditors, we don’t want this trend to continue and having a fee of that magnitude restricts that,” he added.
“Auditor registration fees of that size might deter new entrants and further the concentration going forward and we’ve got to ask ourselves is that a good outcome for the SMSF sector?”
Last year, IPA chief executive Andrew Conway slammed the proposed fees as “exorbitant” and unnecessary, citing how the ATO already collects $259 from each SMSF to finance the SMSF monitoring role the ATO conducts on behalf of ASIC.
Chartered Accountants Australia and New Zealand (CA ANZ) also criticised the proposed fee increase and instead suggested a tiered model where fees are only higher for incomplete or controversial applications.
Compulsory auditor registration was introduced in 2013 for all SMSF auditors, with the intention of booting auditors who dabble in SMSF-based services.
jotham.lian@momentummedia.com.au
Out of the 6,121 SMSF auditors – about 2,000 have the same address – which means that they belong to the same firm – that leaves about 4,000 odd auditors – if an audit takes about 4 hours to complete – or say 2 audits a day for 200 days = 400 funds in a year – this means the current population has capacity to audit $1.6M funds – Do we really need more auditors?
I suspect the government wants to put a structure in place to make ASIC very profitable (analogy: Sydney Airport) so they can flogg it off in their next privatization drive.
As a registered SMSF auditor, I have a self interest in making the registration fee as high as possible to limit competition. I recall my uni lecturer, don’t ask how many years ago, stating that free market competition required ease of entry to the market place. Who wants competition driving down the price of an audit? Not me!
$899 to deregister! Perhaps SMSF Auditors wanting to exit will just go dormant for a couple of years and wait for the Regulator to de-register them. A couple lots of annual fees still is below this gouge, that wouldn’t even be tax deductible.
They have lost their minds thinking we will PAY just to deregister. I’m just not going to lodge my annual statement and eventually they can deregister me of their own accord.
Don’t forget the late fee for not lodging. Don’t ask me how I know.
Cost of doing business really. An annual fee based on funds audited would be fairer. Say $10 per fund.
It would raise more dollars & more auditors could be scrutinized.