In a submission to the Tax Practitioners Board’s draft guidance TPB(I) D53/2024 – Breach reporting under the Tax Agent Services Act 2009, the SMSFA expressed uncertainty about the extent to which agents will be required to conduct due diligence on the work performed by previous agents. There is also concern that the new provisions may affect the transfer of data via software platforms, particularly concerning SMSFs.
“Often the issue will be whether the agent holds or has access to sufficient data or information to identify a breach or a potential breach. Conversely, where cloud software data for a client is transferred from one agent to another, it may be a case of too much information,” the submission stated.
“It would be helpful to understand to what extent RTAs will be required to effect ‘audit’ data for cloud-based software transferred for a client from one RTA to another. The transfer of data files is common practice for SMSFs and is a growing trend in other areas of practice.”
The association said SMSF software contains crucial, quite detailed, and extensive historical data which affect the tax elements of member accounts, cost bases of assets and pension commencement details and can have significant future tax and compliance impacts specifically regarding pensions, adding that the type of pension interest can impact how they are cashed or commuted.
“Despite SMSFs being audited annually, that audit extends only to the fund’s financial statements and compliance with prescribed sections or regulations of the Superannuation Industry (Supervision) Act 1993 (Cth) and Superannuation Industry (Supervision) Regulations 1994 (Cth) respectively,” it said.
“The auditor is not required to conduct an audit of the software platform or SMSF Annual Return lodged with the Commissioner of Taxation. The question asked by our members is to what extent is the RTA expected to re-examine this historical information? While this will be an issue for practitioners with SMSF clients, this has broader implications across a range of taxpayers, particularly as tax and accounting software continues to evolve, providing richer, transferable data.”
