The proposed increase in registration fees for new auditors of SMSFs has triggered major concerns about its impact on the already low number of practitioners servicing the space, according to the Institute of Public Accountants (IPA).
A one-off fee increase from $107 to $3429 is “exorbitant”, while the deregistration fee of $899 for auditors exiting the sector was “even more unfathomable”, IPA chief executive Andrew Conway said today.
“While we understand the objectives of the new funding model and the role of the Australian Securities and Investments Commission (ASIC), we have a major concern over the impact these fees will have on competition, especially when there has already been a decline in the number of SMSF auditors in a market which is being dominated by the major players,” Conway said.
“SMSF auditors, who are members of one of the three professional accounting bodies, such as the IPA, are already well regulated in our co-regulatory system, which requires them to maintain their professional and ethical standards.
“We are calling on the government to reconsider the proposed fee increases, which will deter new entrants from entering the market.”
The ATO currently collects $259 from each SMSF to finance the SMSF monitoring role the ATO conducts on behalf of ASIC.
“This levy was a mere $45 in 2008, but now equates to approximately $142.5 million – 550,000 SMSFs multiplied by $259 – to monitor the sector including SMSF auditors,” Conway noted.
“In 2011/12, the government provided ASIC with $10.7 million over five years to develop and maintain an online registration system for auditors of SMSFs. ASIC also developed a competency exam for auditors, enabling ASIC to deregister non-compliant auditors.
“The government also gave the ATO $10.6 million over five years to police registered auditors, check their compliance with competency standards set by ASIC and, where necessary, refer non-compliant auditors to ASIC for appropriate punishment.”
He noted some of the funding for the SMSF auditor registration process was also sourced by ASIC charging auditors to sit the SMSF auditor competency exam.
“Surely the fee increases under the proposed fees-for-service funding model must take into account the money already being collected via the ATO supervisory levy,” he said.
