As the total number of SMSFs approaches 600,000 the regulators are prioritising and setting criteria to monitor the sector, as described in a recent CPA’s In The Black magazine.
The ATO has identified the following independence issues and poor audit quality issues:
1. Auditor and tax agent are the same practitioner or firm
While not impossible, it can be difficult for an auditor to remain independent when they are working in the same office as the staff preparing the work that they are auditing. At Australian Audit we only do audit work, so this is never an issue. Regardless of who your accountant is, we will be happy to look after your auditing needs.
2. Auditors audit their own fund
This should just never happen. Really, no more needs to be said.
3. The auditor and tax agent/accountant are related
Almost as bad as number two … if you have been using a friend or relative to audit your SMSF, you really should consider changing to an auditor that will be independent.
4. Low-cost audits
There has been a lot of media attention of late regarding SMSF audits that can be completed for $X, regardless of the size of the fund. Just remember if it is too good to be true, it probably is.
All of our SMSF audit work is conducted by trained and qualified staff, who are all based in our Perth CBD office. We do not outsource or offshore any of our work, and all of your information stays securely stored on our servers in Australia.
5. High volume of audits
An auditor that is only completing a handful of audits each year may not remain up to date with the latest changes, and an auditor conducting too many may not spend enough time reviewing the details of your fund before signing off. As a specialist audit firm, you can be confident that our staff and partners are always up to date on the latest developments and are focused on delivering a quality audit service.
6. No auditor contravention reports submitted
Unfortunately each year we always have some clients who have not complied with all of the requirements of being a SMSF trustee, and as a result we are required to lodge a contravention report to the ATO. In most cases the ATO uses this as a way to provide further education to trustees so that they can avoid making the same errors again in the future.