Auditing, Regulation

Survey finds lack of support for triennial audits

There is a fundamental lack of industry support for the triennial audit policy, a new survey has found.

A new survey of SMSF professionals has found 93 per cent of respondents do not support the proposed three-yearly audit cycle for eligible funds, while 94 per cent believe it would lead to a greater risk of contraventions by trustees.

The survey was conducted by Saul SMSF and includes responses from over 280 industry professionals, including 157 accountants and 127 auditors working on the frontline of SMSF administration, accounting and auditing.

It revealed 90 per cent anticipate the proposal would create a greater opportunity for SMSFs to be misused and misappropriated.

When it came to operating costs, 75 per cent said they believe they will increase and 78 per cent think there will be increased time, cost and regulatory burdens on trustees if three-yearly audits are introduced.

In response to SMSF audit costs, 71 per cent think they will increase rather than decrease with the proposed change.

Furthermore, 84 per cent believe the integrity of the SMSF sector will decrease.

In addition to the 30 questions asked in the survey, over 1700 comments were received, largely expressing concerns about how such legislation would be implemented.

Repeatedly, the comments expressed concern among accountants that errors will not be picked up for three years, which will increase retrospective accounting work and potential infringements.

The survey was undertaken as part of Saul SMSF’s submission to Treasury’s discussion paper on the audit proposal.

In a submission letter to Treasury retirement income policy division head Robert Jeremenko, Saul SMSF director David Saul said: “We think you will agree that the engagement of survey respondents in this large quantity of comments represents widespread concern on both the benefits and efficacy of the proposed legislation.

“We respectfully put it to you that annual SMSF audits offer value to accountants, trustees and taxpayers in terms of protection and, as such, should not be considered a cost centre.

“We strongly recommend that the proposed legislation is not passed.”

If legislated, the policy will commence for eligible SMSFs on 1 July 2019.

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