SMSF auditor numbers continue downward trend
Over 300 auditors left the SMSF auditor profession during the 2021–22 financial year following the introduction of independence requirements.
The total number of registered SMSF auditors has now dropped to 5,172 according to the ASIC SMSF Auditor Dataset, which was updated on 30 June.
This represents a 5.8 per cent decrease from the 5,491 SMSF auditors registered at 30 June 2021.
A total of 14 SMSF auditors were disqualified during the 2021–22 financial year based on ASIC’s banned and disqualified dataset.
Earlier this year, actuarial firm Accurium said that the auditor independence requirements from the APESB that came in on 1 July 2021 may be impacting SMSF auditor numbers.
“Many firms have had to put in place new external SMSF audit arrangements where they previously had an internal SMSF audit service and relied on the separation of duties model to comply with the independence requirement,” Accurium explained.
“Similar to the introduction of the goods and services tax (GST) system way back on 1 July 2000, which saw many tax agents and practitioners decide to exit the industry, it appears that the new audit independence requirements are having a similar effect on the number of registered SMSF auditors.”
Given the shortage in SMSF auditors, Hayes Knight director Ray Itaoui told SMSF Adviser last week that SMSF audit firms will likely increase fees this financial year.
“The big four accounting firms have been snapping up SMSF auditors for their company audit divisions. They’re short on auditors and they’re just pulling auditors from everywhere, even if they’ve had no experience with companies,” he said.
“There’s a shortage out there, so a lot of auditors are planning on increasing their fees.”
Mr Itaoui said the independence requirements were still causing chaos for some firms.
In some cases, service delivery has been impacted by staffing issues, he said, with some audit firms taking more than they can handle.
“The smaller firms who are providing audits perhaps haven’t dealt with audits from external firms before, and are struggling to keep up with the volumes. It's pretty chaotic out there,” he said.
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 also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.