In the federal budget last year, the government took the industry by surprise in announcing an intended move to three-year audit cycles from the standard annual audit.
The government has yet to reach a decision on whether it proceeds with the measure. However, the ATO said that it has “very clearly” heard the significant backlash from the SMSF profession.
“We don’t know what the government is going to do about audits, but it has heard the concerns of [the] industry very, very clearly,” said assistant commissioner at the ATO Dana Fleming at the Accounting Business Expo in Sydney.
“I think annual lodgements are here to say,” she said.
Backlash grows
Belinda Aisbett from Super Sphere said that superannuation annual returns were insufficient for assessing eligibility for three-year audits, given that they are lodged directly by the trustee of tax agent and are not reviewed by the auditor.
Concerns have also been raised about the fact that the three-year audit cycle may exacerbate the amount a client has to fork out if they face compliance issues.
Others fear that the proposal could also see increased activity by unscrupulous advisers and promoters targeting SMSFs with early release schemes.
“We have seen many examples of trustees facing a personal or business crisis who all of a sudden borrow large amounts of monies from an SMSF bank account,” TriSuper Auditors director Joel Curry previously told SMSF Adviser.
It is not a surprise that the professional sector is against a cut in revenue. Like always the vast majority of law abiding SMSF’s has to pay – the golden goose called SMSF. I don’t think audits have to be annual or does anyone think that the ATO audits every company every year. I am aware that ‘independent’ auditors audit but that has been proven in many cases insufficient to say the least.
Hope won’t get my vote – see ya ScoMo.
was such a silly idea! – self manage super funds NEED yearly audits to confirm and maintain the compliance in this sector!
A great effort by all involved in voicing our concerns but special thanks to Belinda Aisbett.
I’m very pleased to read this. Great to see the ATO working with Industry Practitioners for better outcomes.
3 yearly SMSF audits on a Stupid Scale of 1 to 10 gets a 15
Agreed. They either need to be annual, or not at all.
Just to be clear – my response related to whether tax lodgements could also be considered for a triennial cycle. This has never been on the table.