Chartered Accountants Australia and New Zealand (CAANZ) and CPA Australia have indicated should the triennial audit cycle for eligible SMSFs proceed, the Australian Securities and Investments Commission (ASIC) may need to review its auditor registration requirements.
In a joint submission to Treasury, CAANZ and CPA Australia have flagged serious concerns regarding the potential impact of the proposed measure to introduce a three-year audit cycle for SMSFs.
Specifically, in response to the Treasury discussion paper’s opportunity to raise any other issues that should be considered in policy development, the industry bodies said: “Notwithstanding our belief that this proposed measure will not meet its stated policy intent, if it were to proceed, how do registered SMSF auditors maintain their currency to be registered if they are auditing a smaller number of SMSFs each year or only once every three years?”
The joint submission said ASIC may need to reconsider its registration requirements otherwise there may be a reduction in the auditor population, resulting in supply shortages and fee increases.
“Similarly, the three-year audit cycle introduces variable workloads and revenue for auditors, so some may exit the sector, the net result may be future supply shortages and upward pressures on audit fees,” it said.
“In addition, because of variable or potentially unpredictable workflow, coupled with significantly higher ASIC registration fees being introduced with the ASIC industry funding model, fewer auditors may be attracted to the sector, which may lead to similar outcomes.”
CAANZ and CPA Australia represent over 200,000 professional accountants in Australia.
Over 90 per cent of registered SMSF auditors are chartered accountants or certified practising accountants, the submission said.
