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 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.