The ATO’s Practice Statement Law Administration (PA LA) in relation to determining whether matters concerning approved SMSF auditors should be referred to the Australian Securities and Investments Commission (ASIC) must be carefully read by super trustees and advisers.
In its October pensions and superannuation regulatory update, QMV legal and risk principal consultant Jonathan Steffanoni recommended “that superannuation trustees and financial advisers review the material in the practice statement to ensure that any future or current SMSF auditors associated with the organisation are in contravention”.
PS LA 2018/1 sets out the factors to consider in forming an opinion on whether an auditor is not a fit and proper person to be an approved SMSF auditor; in conducting an audit, has contravened the Superannuation Industry (Supervision) Act 1993 or its regulations; or has failed to perform adequately and properly any of their required duties and functions.
The practice statement outlines when matters concerning an approved SMSF auditor can be referred to ASIC, as well as the considerations to take into account in forming the opinion an approved auditor is not a fit and proper person to be an approved auditor.
It also covers professional obligations, reporting obligations, advising the tax commissioner of the financial position of an SMSF, auditor failure to comply with requests for information, and several examples in relation to these areas.
ASIC is the registration body for approved SMSF auditors, with the registration regime effective from 31 January 2013.
The ATO commissioner is provided with powers to monitor auditors’ compliance with relevant standards and to refer any non-compliant auditors to ASIC for enforcement action consideration.
ASIC is responsible for taking enforcement action against auditors who have not met their ongoing obligations.