ATO refers 13 SMSF auditors to ASIC

The ATO selects high-risk auditors where its data or intelligence indicates an inability to identify reportable contraventions; high volume, low ACR ratios; and high volume, low-cost audits. It also selects auditors where its data has identified potential independence breaches.

Of the 13 high-risk auditors that were reviewed, a total of 11 were referred to ASIC by the ATO.

ATO statistics also revealed that seven of the high-risk auditors reviewed voluntarily cancelled their registration.

Only two SMSF auditors from the top 100 program were referred to ASIC. Five received education directions for minor deficiencies and only one auditor was found to be fully compliant.

This follows action that was taken by ASIC in the September quarter against SMSF auditors when it disqualified three SMSF auditors from being registered.

ASIC also imposed conditions on the registration of one SMSF auditor and cancelled the registration of another two SMSF auditors.

These actions resulted from breaches of obligations including auditing and assurance standards, independence requirements, and registration conditions, or because ASIC was satisfied the individual was not a fit and proper person to remain registered.

Five of these auditors had also been referred to ASIC by the ATO.

The ATO stated in October last year that it would be reshaping the approach of its SMSF auditor compliance program.

ATO assistant commissioner Justin Micale said the ATO would work with ASIC to increase the coverage of the program and introduce a broader range of treatments to address risk in the industry.

“This program of work is expected to deliver a higher rate of referral to ASIC in the coming financial year and, as a result, increased visibility of how both agencies are working effectively as regulators to address inappropriate behaviour,” said Mr Micale.