A specialist SMSF firm has proposed alternative measures to the federal government’s three-yearly audit proposal to achieve cost savings for the sector.
In a submission to Treasury regarding the audit-cycle discussion paper, Super Sphere director Belinda Aisbett outlined five ideas that would assist in achieving real cost savings.
The measures included removing the need for certain minor contraventions to be reported to the ATO, thereby saving audit time and tax office resources, and removing the need for the auditor to review certain documentation, thereby saving audit time.
Aisbett also suggested consultation with standard setters to design more relevant and efficient mandatory auditing standards applicable to SMSF audits.
She also said removing the requirement for pension funds to obtain actuarial certificates to confirm 100 per cent of the fund is in pension mode, and is therefore eligible for an exempt pension deduction, will cut unnecessary costs for some pension members.
Treasury should also consider implementing a mechanism whereby an SMSF could elect duplicate copies of bank statements to be sent to their auditor directly from the bank, she said.
“This would remove the need to request and pay for bank audit certificates,” she noted.
“This would save audit time and therefore reduce audit fees along with avoiding the hard costs charged by the banks to supply the confirmation certificate to the auditor and to the fund directly.”
Aisbett, who heads up the SMSF Auditors Lobby Group, established in response to the audit proposal contained as a surprise measure in this year’s budget, highlighted these suggested cost-saving measures would save time and reduce audit fees across the board for all superannuation funds, not just a select eligible few.
“This would benefit the whole industry and SMSF trustees, whilst maintaining the integrity of the superannuation system,” she said.
“We believe the practical difficulties of auditing three years at once would lead to an increase in audit report qualifications, particularly around insufficient audit evidence, which would inevitably detract from the integrity of the sector.”