The Australian Securities and Investments Commission (ASIC) has cancelled the registration of 36 SMSF auditors who have failed to maintain an appropriate level of audit experience and has imposed conditions on a further six auditors who also have non-SMSF experience.
ASIC stated it made the cancellations after reviewing the registration of the 42 SMSF auditors and finding they had not issued any SMSF audit reports in the past five years. In failing to issue an SMSF audit report in that time, the auditors were considered by ASIC to not have the necessary practical experience required to perform SMSF audits.
The corporate regulator stated the imposition of conditions on six of the 42 auditors was preferable to cancelling their registration after consideration was given to each auditor’s individual circumstances and other relevant, but non-SMSF audit, experience.
The conditions imposed on these auditors will include independent reviews where a number of audits will be reviewed by an independent SMSF auditor for compliance with auditing standards, further education in specific courses of study focused on audit and fund compliance requirements under the Superannuation Industry (Supervision) Act 1993, and the successful completion of ASIC’s SMSF auditor competency exam prior to issuing any SMSF audit reports.
The ASIC action follows on from a number of cancellations and suspensions of auditors earlier this year, including four auditors disqualified and two suspended in April after another auditor was also disqualified and six were suspended in February.
Earlier this year, the ATO highlighted it was finding problems with the behaviour and practices of auditors in its ‘top 100’ list and had begun referring a number of those cases to ASIC for further action.
Auditors have also been informed they will face higher levels of scrutiny around their independence under new standards, advocating on behalf of clients, and the failure to report breaches of early release provisions.
