SMSF auditor exodus continues in first quarter
Over 100 SMSF auditors have left the profession this financial year so far, with auditors expecting the trend to continue.
Data from ASIC’s SMSF Auditor Register has revealed that a total of 110 SMSF auditors have left the SMSF audit profession this financial year already.
There was previously 5,172 SMSF auditors registered at the end of June, following a 5.8 per cent drop during the 2021–22 financial year.
Speaking at a recent Heffron event, ASF Audits head of education Shelley Banton said she expects SMSF auditor numbers will continue to fall over the next year.
“[The reduction in auditor numbers] isn’t necessarily surprising when you consider the number of auditors who are still doing 50 audits or less,” said Ms Banton at the Heffron Super Intensive Day.
“When you break that down even further into the 20 audits or less bucket, I imagine it would be difficult to undertake an efficient, professionally qualified audit for 20 or less funds given the amount of legislative and technical knowledge required.”
Following the recent auditor independence changes that have applied from 1 July 2021, Ms Banton noted the industry has also lost a lot of quality in-house auditors.
“What we don’t want to see is a brains trust leaving the industry. We don’t want to get to the point where there are only a few firms left standing,” she said.
Having a more limited pool of auditors could also potentially impact the integrity of the audit profession, she warned, as there will be a smaller number of auditors comparing professional opinions.
The SMSF industry she said needs to work on finding new ways of attracting people into the audit profession.
“Compliance is an area which can take you to a lot of different places and having that knowledge of SIS under your belt really makes you a specialist in that area,” said Ms Banton.
“You can build an [audit] business regardless of whether there’s a pandemic, GFC, floods or whatever else. Compliance just keeps ticking on. So there is a lot of upside in terms of moving into the industry.”
Ms Banton said the SMSF industry in general must ensure its attracting the right professionals.
“We need to get new people through so that we can train them up and keep the integrity of the industry going,” she said.
Hayes Knight director Ray Itaoui previously told SMSF Adviser that a shortage of auditors in the broader auditing profession has resulted in the big four accounting firms poaching auditors from the SMSF space.
“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.

Miranda Brownlee
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.
- Cheap is NEVER better than GOOD when it comes to audit services. There are many decent auditors out there who don't necessarily do more than 50 audits. They still maintain their skill levels with adequate training as required. We need as many good auditors in the system and available, otherwise this whole thing will fall down. The large organisations will have good systems and economies of scale. That might affect their pricing. I much prefer an Australian Auditor than someone offshore. But if we lose numbers, there might be no choice!0
- The aspect that always flaws me is that it is the trustees' money. If they want to rent a property below market rent, that is their choice. ATO/ASIC behave as though it is somebody else's money that they feel obliged to act as big brother. The entire Super system in this country is a complete disaster. Why take 15% every time they contribute. This does not happen in other countries.0
- Any accountant can prepare accounts of an SMSF with help from some of the accounting softwares. SMSF accounting is not about book keeping it is about "strategy" - and a knowledgeble accountant is the best person to provide that support - provided he has ASIC's limited licence - he does it anyway's with or without a licence.
Compliance to law is the Trustees responsibility - which any accountant can trace and should advice the auditor before commincing their audit. Auditors role has become to check the knowledge of the accountant and reasons why he was not told of a certain breach.
The problem in the chain is "Knowledgeble SMSF Accountant"
and
Knowledge Auditors as only about 5% of SMSF's are reported for breaches.... there are skelletons in the closet0 - Financial Planners with zero idea of APES110, wanting a friendly, inadequate cheap audit.
Why ATO/ASIC aren't looking at offshore outsourcing is insane.0 - ASIC just money grab. They charge everyone an exit fee, and yet exit fees (likely now part of their admin fee) are now banned when switching between superfunds. Go figure. Do as I say, but not as I do. That is ASIC.0
- SMSF’s are remarkably consistent in what they invest in from year to year. There is no way that a fund with cash & listed shares should pay the same audit fee as one with complex rental property or unlisted investments.
For an SMSF with a business real property investment leased to a related tenant, the auditor needs to check on leases, that outgoings clauses and rent reviews were followed, ensure the rent was paid on arms length terms and review evidence of an arms length rate. Not to mention all the other valuation/appraisal investigations the ATO want now to confirm the property is correctly valued., annually. The fund is likely registered for GST also. Add in a annual title search outlay the ATO expects!
There is no way that a one size fits all audit fee can encompass this work, and the audit and the auditor suffers.
The same can be said for SMSFs investing in unlisted trusts and companies. The investigation or related party issues can’t just be assumed. Add to that obtaining financial statements and market values, then being liable to be sued if the dodgy thing falls over?
Perhaps SMSF auditors who charge one size fits fees all should be investigated for their fees not being at “arms-length”?!
0 - So long as the auditor is made responsible for everything that can go wrong with an SMSF they will continue to leave. The sooner the preparer of the crappy financials or poor record keeping is held to account the better, instead of putting it all on the auditor.0
- Absolutely agree! If you call yourself any sort of professional SMSF administrator you would NEVER hand over a file to an auditor with an unidentified compliance problem. Compliance issues need to be identified during the admin process, then fixed or resolved with the client or some rectification measures or plan put in place. Then if the auditor does need to do an ACR, at least they can note to the ATO that it was rectified post balance date.
If the auditor finds a compliance issue, I guarantee you your client will be kicking YOUR ass, not theirs!
I find it a common attitude amongst SMSF accounting staff that pumping out the financial statements is their only job, not identifying compliance issues. I’d counter that by saying if that’s your attitude, I can hire unqualified bookkeepers and I don’t need to send you to any more fancy expensive SMSF seminars!
0- Well said
This is why our audit fees start with a 2.
Crap financials and compliance issues not identified or addressed. Staggering.0
- The only ones who should ever be held accountable for SMSF errors and failings are the Trustees. Heaven forbid people take responsibility for their own negligence or stupidity.0
- I have one accountant, I'm about to dump, because they use the audit as QC for their hopeless accountant. Literally can't be bothered with ensuring the distributions reconcile, no idea about SIS, really poor financial statements and 2 months go to wrap up. Time waster.0
- Low fees but high risk.
Completing the audit probably takes more time these days then completing the financials.0 - The number of SMSF's growing; the number of SMSF auditors falling - sounds like a real problem looming!0
- Yes, of course ASIC wouldn't attribute any part of the reduction in SMSF auditors to the extortionist registration fees charges by the unregulated, unaccountable, over-worked(?) ASIC.0