Offshoring considerations flagged with outsourcing decisions
For SMSF firms currently in the process of finding audit firms to outsource their clients to, determining whether the a firm uses offshoring arrangements may be an important factor to consider, says SuperSphere.
Speaking to SMSF Adviser, SuperSphere director Belinda Aisbett said for firms that are currently providing in-house audit services and are now looking for new audit firms to outsource to, offshoring may be one of the less obvious aspects to consider when making comparisons between different firms.
A lot of the firms in this position will compare the fees of different firms and don’t realise that the lower fee ranges are the result of offshoring.
This could be very important for firms that don’t want to have their clients’ financial information going offshore.
“Accountants who are looking to outsource that work really need to cover off on and make sure they’re managing their client’s expectations as well,” she said.
Ms Aisbett also stressed the importance of both the audit firm and SMSF firm outsourcing the audits ensuring they’re the right fit for each other.
“For example, if the previous auditor in their firm has been charging $250 per audit, then we’re not going to be the auditors for them, because we charge a more realistic market rate. We don’t do fixed fees, we do time-based audits and we have local staff. So, it’s important to make sure you’re both on the same page,” Ms Aisbett explained.
However, fees are only part of equation, she said, with the audit firm needing to ensure the client is aware of its requirements in terms of audit evidence.
“We want to make sure that the client is aware of our requirements for property valuations, for example. There are some auditors who want a sworn valuation every financial year. We don’t need that, we just need a real estate agent appraisal,” she said.
“We also make sure they’re aware of our need to get bank account confirmation. There are some accounts that are still not covered by data feeds, so there may be the odd occasion where we do need them to send a confirmation.
“So, making sure the firm is aware of all the particulars of how we operate our audit practice, I think that’s really important so you don’t have that clashing of expectations once you get into the work.”
Expectations around timing should also be discussed, she said.
“There are also some auditors out there that say they will turn an audit around in 24 hours. I find that problematic for a number of reasons, but if that’s the expectation of the prospective client, then we need to make sure we knock that on the head because we can’t turn audits around in that time frame,” she said.
“If we need to obtain further evidence, that always takes longer than 24 hours, and so we need to make sure that the client doesn’t have unrealistic expectations.”
Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.
Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates. Miranda has also directed SMSF Adviser's print publication for several years.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.