SMSF auditors urged to proactively identify SAN misuse

“We’re encouraging SMSF auditors to take responsibility for the security of their SAN by using the ATO’s Audit Complete Advice portal,” said Jane Rennie, general manager of external affairs at CPA Australia. 

“The ATO data matches the information provided by auditors through the portal with the SANs disclosed in SMSF annual returns.”  

The deliberate misuse of SMSF auditor numbers had been identified as an ongoing area of concern with the ATO and the TPB, with 74 tax practitioners singled out last year over such misuse.

Last month, a Perth-based tax agent saw his registration terminated after he was found to have lodged 125 SMSF annual returns over nine years with false SAN declarations.

More recently, a Sydney tax agent was sentenced to an 18-month community corrections order after misusing an SAN to lodge 30 SMSF annual returns over five years.

The ATO has been attempting to tackle the issue with its SAN misuse mailout — a list to auditors of all SMSFs that reported their SAN — with the Tax Office now receiving the highest response rate it has had to date.

Dr Rennie said that while the mailout was a “terrific initiative” by the ATO, SMSF auditors needed to ensure they were doing more to ensure their SANs were not being abused.

“If auditors wait until they receive a list of SMSF audits using their SAN from the ATO, there’s greater potential for ongoing misuse,” Dr Rennie said.

“SAN misuse by a tax agent poses a professional risk for SMSF auditors. If an auditor’s unique identifier is being applied to audits they haven’t done, it’s their reputation on the line. So, it’s in their interests to proactively guard against SAN misuse.

“An SMSF auditor number is a unique identifier, much like a signature. If your signature was being applied to financial documents without your knowledge or consent, you’d want to know about it quickly, wouldn’t you?”