With just nine months remaining before the new financial year, thousands of accounting firms across Australia need to act fast to review their approach to SMSF audits.
The Accounting Professional & Ethical Standards Board’s newly updated Independence Guide specifies that an SMSF auditor cannot audit an SMSF where the auditor, their staff or their firm has prepared the financial statements for the SMSF unless it is a ‘routine or mechanical service’.
However, as Arthur Favos, CEO of Evolv Super, explains, “Not only does the concept of Chinese walls no longer hold up, the ATO has made it clear that very few firms will be able to rely on the notion of providing ‘routine and mechanical’ services in order to tick the box for audit independence”.
“The reality is that accounting firms need to evolve. That means taking a close look at where they could be in breach of the independence requirements, and putting actionable plans in place today to ensure a streamlined transition by 1 July 2021.”
A simple evolution to independence
Achieving SMSF audit independence can appear to be a daunting process. But there are straightforward solutions that firms should be exploring ahead of time.
Evolv Super offers a flexible suite of products for SMSF audits. Evolv White delivers custom-built SMSF auditing software that eliminates the need for manual processing, and automates the audit to provide consistency, quality, efficiency and valuable time savings.
Evolv Grey is a resourcing solution that supports increased capacity. It sees the labour intensive aspects of SMSF audits handled by Evolv, with a near-finished product delivered ready for a firm’s own branding.
At the top end of the scale is Evolv Black. This involves the SMSF audit being conducted by Evolv’s own professional team, using our cutting edge Evolv White technology to deliver a truly independent and cost-effective result. “Feedback from our clients shows that Evolv Black provides real peace of mind that a firm is meeting independence requirements,” notes Favos.
Accounting firms stay ahead of the game
According to Favos, many of Evolv’s clients are already laying the groundwork to achieve SMSF audit independence.
“Change is often disruptive,” notes Favos. “But it doesn’t have to be, and we are seeing a growing number of accounting firms use Evolv’s suite of products to make a seamless transition to audit independence ahead of 1 July 2021.”
He explains, “Evolv White can be the ideal option for firms completing SMSF audits that are not part of a reciprocal arrangement. Along with time efficiencies, Evolv White can be used through 2020, allowing skilled employees to be diverted to higher fee-generating activities. Then, as we head towards the new financial year, many of these firms plan to transition to Evolv Black.”
Other Evolv clients are staying one step ahead of the curve with a timeline of transition already in place. “We are seeing our mid-tier accounting firms upscale from Evolv White to Evolv Grey, and from there they plan to switch to Evolv Black by January 2021 to be sure they are meeting independence requirements long before 1 July.
“It’s all about embracing the flexibility of the Evolv ecosystem to begin your firm’s independence journey today,” said Favos.
Don’t wait, start your independence journey today
Discover the Evolv solutions that are right for your practice and start the transition today by contacting David Goldsmith at Evolv on dgoldsmith@evolvsuper.com.au or to learn more visit evolvsuper.com.au.
