SMSFA calls for longer transition period for APESB standards

“With regard to the restructured code and the Accounting Professional & Ethical Standards Board (APESB) new independence guide, the SMSF Association is primarily concerned with ensuring the SMSF sector has a sufficient transition period to properly adapt to the requirements of the restructured code,” Mr Burgess said.

“We believe a longer transition period, than that which has already been advised by the ATO, is required to ensure SMSF accountants are able to outsource their in-house audits without jeopardising their businesses.”

Mr Burgess stressed that the restructured code and APESB guidance are a significant commercial change to the operation of many SMSF business and will not be easy, particularly as the industry deals with the impact of COVID-19.

“We believe a minimum approach would be for all audits for the 2020–21 financial year onwards to be subject to the restructured code,” he said.

“However, a continued associated risk with this approach is if firms delay appointment of a new auditor until the latest point (45 days before the due date of the annual return) and there is a bottleneck due to the volume of outsourced work in a shorter restructure period.”

To allow all affected parties to implement new procedures and contracts over the next 12 to 18 months, the SMSF Association’s preferred approach, he said, is for all audits completed post-1 July 2022 to be subject to the restructured code.

“We believe it’s important that no firm is put at a competitive disadvantage by taking a risk-adverse approach while other firms push the boundaries,” he stated.

“With this in mind, we continue to encourage the ATO and ASIC to publish further examples of what they deem to be ‘routine or mechanical’ and/or the limited scenarios where in-house audits can continue.”