In a public update, the ATO said in May it completed a mailout to 5,446 SMSF auditors which provide them with a list of funds who had reported their SMSF auditor number (SAN) on SMSF annual returns for the 2017 income year. To date, 2,739 auditors have responded.
“While we assume those auditors who haven’t yet responded didn’t detect any problems with the use of their SAN, we still encourage them to contact us to confirm this was the case,” it said.
Of the auditors who responded, 2,319 confirmed no SAN misuse. The other 420 auditors reported 1,445 instances of potential SAN misuse involving 626 tax practitioners.
The ATO said it is currently contacting these practitioners to determine whether they’ve deliberately misreported a SAN.
“So far, we’ve seen some very concerning behaviour. Some practitioners have fraudulently charged clients for audits that didn’t occur and some have even prepared false audit reports with forged auditor signatures,” it stated.
“We treat this behaviour very seriously and propose to refer these matters for criminal prosecution.”
In addition to considering prosecution, the ATO said where it identifies inappropriate use of SANs by tax practitioners, it will refer them to the Tax Practitioners Board (TPB) to determine whether the practitioner’s conduct has breached the Code of Professional Conduct of the Tax Agent Services Act 2009 (TASA).
“We referred five tax agents to the TPB last financial year for deliberate SAN misuse,” it said.
The ATO said all SMSF auditors will get another opportunity to review the list of funds that reported their SAN on SMSF annual returns for the 2018 income year as part of a further mailout scheduled to start in early September and conclude in October.
“We trust our continued mailouts will decrease the misreporting of SANs,” it said.
Hopefully the majority of these are actually inadvertent errors (eg changed auditor but did not change details on return which rolled forward from previous year).
However, forgery of audit reports & charging clients for audits not done certainly warrants deregistration if not criminal charges for fraud.
Unlikely to be inadvertent. The auditor sees the Tax Return as well as the accounts, so should surely pick up an incorrect auditor reference.
That inadvertent error happened to me on one fund out of about 100 and the ATO contacted me about it. Hopefully I won’t end up in jail. However I do understand this is worse than killing people (who often go free) so am looking forward to the break.
Its a little scary when you see an audit report with your own signature on it, on a forged letter head (not my own) for audits i didn’t do. Isn’t that a serious offence. Its happened to me just a month or so ago for an accounting firm we used to audit their funds. some years back they ceased communicating with us but stole my signature and kept issuing audit reports with a fake letter head. So sad that tax agents need to stoop so low.
lol, having a auditor checking the books annually deters people from doing non-compliant things…
No information as to whether these ‘un-audited’ SMSF’s were more likely to be non-complaint. Leaves open the possibility that the SMSF’s were no more non-compliant than the population of correctly audited SMSF’s. If true what the ATO have hit on the misuse of SMSF auditing requirements rather than misuse of SMSF’s. Goes back to the question of why SMSF’s need to be audited in the first place? Tax Agent’s preparing PTY LTD returns (note Pty Ltd’s like SMSF have very concessional tax rates) do not need an audit. Many a PTY LTD tax return etc is also far more complicated, with follow on risks to the revenue than your typical SMSF. There is little to no logic in a lot of regulation and because of it it your typical bureaucrat often refuses to respond to any question that may shed a poor light on the purpose of their jobs and what they do. Some data, when available, on whether the identified SMSF were more likely non complaint please Mr(s), Ms ATO bureaucrat.
I contacted the ATO 16 years ago about this issue and it has taken them that long to discover the issue and to something