The ATO will continue its focus on SMSF auditors and will closely monitor those who operate under three key areas of concern, according to a superannuation specialist.
“The ATO rely on us, the auditors, as the gatekeepers of the SMSF environment, so in terms of the ATO’s focus they are clearly targeting, and they make no bones about it, low-cost audits,” BDO superannuation partner Shirley Schaefer said during an Institute of Public Accountants SMSF audit update.
“It doesn’t mean that there’s anything wrong with them and I’m not forming judgments on prices – that’s a business decision you have to make.
“But if you are doing audits for $100, the ATO are going to want to understand how you can do as much work as you need to do for that price.
“Another clear focus for the ATO is those auditors who do a low number of audits – they want to know that these auditors are doing all the education that’s necessary to ensure they’re up to date with all the requirements.”
Schaefer added independence was another key issue for the ATO.
“They’re looking at whether the auditor and tax agent address is the same,” she said.
“Again, it doesn’t mean there’s going to be a problem, but it is an indicator [of a potential breach of auditor obligations].
“Another independence issue is clearly where the name of the trustee is the same as the name of the auditor.”
According to ATO data, the number of SMSF auditors conducting audits of less than five funds dropped to 15.7 per cent in 2014 from 36.9 per cent in 2010.
“Those auditors doing a smaller number of funds have dropped away substantially and have shifted into the next two categories of [five to 50 funds, and 51 to 250 funds],” Schaefer said.
Since 2013, all approved SMSF auditors have been required to be registered with ASIC.