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ATO scrutinising high-volume auditors

The ATO is performing a greater number of SMSF auditor reviews, with a particular focus on practitioners who are providing audit services to a larger number of funds.

“They came out to see me a few weeks back to talk about things generally and they are doing more reviews of auditors,” BDO superannuation partner Shirley Schaefer told the 2015 CPA Australia SMSF Conference in Sydney recently.

“And they’re focusing on those people doing a high number of audits.

“So if you’re signing off 1000 audits in your own name, the ATO is going to want to know if you have the capacity and systems and structures in place to do that number [of audits].”

Schaefer also informed delegates of the tax office’s new approach to reviewing funds.

“One of the other things the ATO has been doing, and they did this with one of our clients, is they want a face-to-face meeting [involving the] trustees, the tax agent and the auditor,” she said.
She stressed those meetings were not pleasant occasions.

“[The fund was adjudged to be] medium risk. This guy had repeated contraventions, not big in value, but just the same contravention year in year out, not because he was deliberately dodgy; he was just generally hopeless and didn’t get around to doing stuff on time,” she said.

“He got a very stern ticking off by the ATO officer. Let me tell you I was scared. She was mean.”

The client in question though rectified the contraventions, proved to the ATO rectification had been performed, and gave an assurance the contraventions would no longer happen in future, leaving the regulator satisfied with the outcome, she said.

“I did think the whole face-to-face thing was [to see if the trustee] would show a bit of contrition to the ATO and be genuine about fixing the problems,” she said.

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