With SMSF annual return deadlines looming large, SMSF auditors have been urged to use the ATO’s Audit Complete Advice portal to ensure their SMSF auditor numbers (SAN) are not being misused.
“We’re encouraging SMSF auditors to take responsibility for the security of their SAN by using the ATO’s Audit Complete Advice portal,” said Jane Rennie, general manager of external affairs at CPA Australia.
“The ATO data matches the information provided by auditors through the portal with the SANs disclosed in SMSF annual returns.”
The deliberate misuse of SMSF auditor numbers had been identified as an ongoing area of concern with the ATO and the TPB, with 74 tax practitioners singled out last year over such misuse.
Last month, a Perth-based tax agent saw his registration terminated after he was found to have lodged 125 SMSF annual returns over nine years with false SAN declarations.
More recently, a Sydney tax agent was sentenced to an 18-month community corrections order after misusing an SAN to lodge 30 SMSF annual returns over five years.
The ATO has been attempting to tackle the issue with its SAN misuse mailout — a list to auditors of all SMSFs that reported their SAN — with the Tax Office now receiving the highest response rate it has had to date.
Dr Rennie said that while the mailout was a “terrific initiative” by the ATO, SMSF auditors needed to ensure they were doing more to ensure their SANs were not being abused.
“If auditors wait until they receive a list of SMSF audits using their SAN from the ATO, there’s greater potential for ongoing misuse,” Dr Rennie said.
“SAN misuse by a tax agent poses a professional risk for SMSF auditors. If an auditor’s unique identifier is being applied to audits they haven’t done, it’s their reputation on the line. So, it’s in their interests to proactively guard against SAN misuse.
“An SMSF auditor number is a unique identifier, much like a signature. If your signature was being applied to financial documents without your knowledge or consent, you’d want to know about it quickly, wouldn’t you?”
The ATO should send a text or email to the auditor with the fund lodgement confirmation. The tax form could be updated to include either/both auditor contact details. The ATO have the software. Not all auditors are fully automated. Not all tax lodgements are online.
why not a monthly report for smsf auditors of tax returns lodged with their san
How about a built-in mechanism where Tax Return lodgement via SBR is rejected until the auditor has lodged their audit completion report. There are plenty of existing validation tests that need to pass before a Return is accepted, and this would be a simple matter of matching the Fund TFN at the back end before the Return is let through.
Great suggestion DavidL, that’s certainly also feasible provided that the audit software vendors automate the audit completion report lodgment process.
Agreed with the comments about audit completion and linking with SBR, but what about those audits that are completed manually still? I’m sure there are many auditors out there that don’t use a software, so there has to be an option for them too? Maybe they are required to lodge through eSat or OSB?
I agree – the information is already lodged with the ATO, how about the ATO provides a report to the SMSF auditor each month of the annual returns which quoted their SAN?
Appreciate your comments Vicki C but that still sounds manual for me from the SMSF auditor’s perspective. Just automate it – audit software automatically notifies ATO when an audit has been locked down (accountants/administrators not having access to the auditor’s software). The ATO systems can then cross-check against SANs on returns that accountants/administrators lodge for clients. System flags aberrations and auto-reports to the ATO and the auditor. ATO follows up accountant/administrator with whatever action they deem appropriate. No human hands should need to touch this cross-checking process.
I understand the point. But why make this a manual process? It’s another “step” that most of us (myself included) just do not have the time to do. The ATO should be working with all of the SMSF audit software providers to make it happen automatically – maybe when an audit file is completed and locked down. There just HAS to be an easier way. Until that happens, they’re unlikely to get my data. Sorry not sorry.