The ATO said it recently issued a follow-up email to all auditors to serve as a reminder to reply to the SAN misuse mailout.
“To date, we have emailed client lists for the 2019 income year to 4,899 auditors, which totalled 479,635 funds,” the ATO said.
“We are pleased to say that we have received a response rate of over 67 per cent, the highest that we have ever had. Thank you for your positive response to the mailout.”
The ATO said the responses helped confirm that 287,459 funds received an audit by the auditor reported in the 2019 annual return.
“It also revealed that 1,315 funds did not correctly report the auditor on their return,” the ATO said.
“We will soon be reaching out to the tax professionals of these funds to determine whether the SAN misuse was a result of inadvertent or deliberate reporting.”
The Tax Office also stated that later this year, it will send the reported client lists for the 2020 income year. It was noted that for future reference, auditors can reduce the number of clients that are needed to confirm audits by lodging an audit complete advice (ACA) with the ATO.
Previously, the ATO reminded that following one of the SAN misuse mailouts, an SMSF auditor carefully reviewed their client list and found there were funds listed that they did not audit.
“After they contacted us to let us know, we began an investigation which revealed further funds had not received an audit,” the ATO said.
“Over a period of nine years, Adamson & Cross lodged a number of self-managed superannuation fund (SMSF) annual returns and falsely declared the SMSFs had been audited when no audits had taken place.
“We referred this case to the Tax Practitioners Board (TPB) who uncovered that the partnership lodged 125 SMSF annual returns.
“The TPB decided to terminate the registration of Mr Cross on the grounds of misconduct and imposed a two-year non-application period. The registration of Mr Cross’ partnership, trading as M. Adamson and A. Cross (Adamson & Cross) was also terminated.”
The ATO said this serves as a reminder as to how seriously it takes SAN misuse.
“Having concluded our most recent and most successful mailout, we will soon be contacting tax professionals where instances of SAN misuse may have occurred,” the Tax Office said.
It won’t be long before auditors are asked to audit and or lodge the tax return
Sorry Mr ATO but you keep putting more and more on SMSF auditors. When will it end? My time doesn’t come for free. I’ll give you the data if you pay for my time to collate it.
Comment # 2
After the audit report is sent to the tax agent, the SMSF Auditor has no way of knowing what was actually lodged by the tax agent. When I was an SMSF Auditor, I wanted a copy of the return as it would be lodged, but had no way of knowing what happened later.
We provide our SMSF Auditor with a scanned copy of the lodged Tax Return, complete with ATO Validation Report confirming lodgement, so they have a record on file. Not hard to do, and no doubt gives the auditor comfort that all details have been recorded correctly, and lodged as per the audited draft.
The ATO wants SMSF Auditors to send an Audit Complete Advice. Next step would be to attach that to the SMSF return file, so the Tax Agent can confirm that all is above board, before lodging. And, the ATO could develop a Pre-Filling Report for SMSF returns. These returns often have much more complicated investments than individual returns…
The ATO should be able to notify the auditor when a tax return is lodged with their SAN. It would be as simple as an email, once the SMSF return was submitted. They could include the audit date in the email. They have all this information at their fingertips, but they seem very reticent to share with those who are impacted. This process would reduce the worry to auditors.
This BS that the ATO pushes more work down to the auditor. Audits for 2020 year are miles behind. The ATO would be better off chasing defaulting TAs and match the data themselves.
Surely the lodgement process can work better. If my audit software produced an encrypted code for the TA. Lodgement could then occur.
Matching data on a spreadsheet sent by email is dark ages technology. I am one of the 33%.