The registration process has resulted in the number of SMSF auditors dropping significantly, but sector experts participating in a recent industry roundtable admitted they were anticipating a further reduction in the size of that group of professionals.
“From what I understood, there were over 12,500 auditors prior to the introduction of the audit registration piece,” Evolv Super managing director Ron Phipps-Ellis said at the seflmanagedsuper industry roundtable forum.
“What I’m hearing is that of the 7000 who have managed to get grandfathered through the process, they took the opportunity to go and get registered because it was easy and it didn’t cost much.
“It’s going to be interesting, in my view, to see where those numbers fall for the end of this financial year and maybe into the next calendar year as well. I’m a bit dubious as to whether that number will rise. I’m not really sure. I personally think it might reduce slightly.”
SMSF Professionals’ Association of Australia technical and professional standards director Graeme Colley concurred the number of SMSF auditors might fall from its already reduced level as the process was still not complete.
“I mean you’re talking 7000 auditors now. Many of those auditors, from what we understand, are still auditing less than 10 or 20 funds, so surely they don’t have a critical mass to make any money out of it,” Colley said.
“[Maybe] that will all aggregate and maybe you’ll end up with 2000 or 3000 auditors who will actually have a critical mass to really influence the sector.”
Phipps-Ellis said changing methodologies might end up compensating for the fewer number of auditors servicing the sector.
“I think what’s going to start happening is there will be a shift in audit approaches that just has to happen naturally. Those who are still doing it by paper will really struggle to get any level of scale,” he said.
“Technology really has to start being embraced going forward. Will there be the defragmentation in the audit world that’s been happening in the super administration world?
“Well, we haven’t seen it yet and I suppose that’s because not too many people want to invest in an audit business.”
NowInfinity principal Grant Abbott said he believed the industry was already seeing the effect of technology on SMSF audits, with efficiency being the noticeable result.
“The big change probably over the last few years has been everything moving to the cloud, which just makes the auditor’s job so much easier rather than having to get all those work papers from some server somewhere in some accountant’s office,” Abbott said.
“It just makes it a lot easier now to start a program that will allow you to actually find your risk.”
