The ATO has reiterated its contravention reporting requirements for finalising SMSF audits in the run up to the end of the financial year.
The regulator stated auditors are required to qualify SMSF independent auditor reports if they are of the opinion a contravention has occurred or is likely to occur, and immediately notify the ATO of any reportable contraventions.
“Reporting a contravention must be done immediately after you have formed your opinion. Failure to do so can result in a penalty of 50 penalty units, currently $210 per unit,” the ATO said.
“If the contraventions haven’t been rectified, the trustees should also consider making a voluntary disclosure to us and include a rectification proposal.”
The reminder comes six weeks ahead of the end of the financial year and follows recently released yearly SMSF data.
The data revealed 5 per cent of all SMSF auditors were responsible for 49 per cent of all SMSF audits for the year ending 30 June 2017, accounting for 48 per cent of total SMSF assets.
Earlier this year at the SMSF Association National Conference, ATO Superannuation Assistant Commissioner Dana Fleming identified Auditor Contravention Reports (ACR) as one of the main means by which the regulator identifies contraventions.
“In the 2018 financial year, excluding directions to educate, of the nearly 17,000 contraventions reported, we only needed to take proactive enforcement action in 180 cases. We rely on approved SMSF auditors to perform an independent and adequate SMSF audit before a fund lodges its annual return,” she said.
According to Fleming, the ATO’s top 100 SMSF approved auditors represent 31 per cent of the SMSF population, equating to approximately $170 billion in assets.
“We focus on this population to provide assurance that almost a third of the SMSF sector is receiving adequate audits,” she added.
The move to clarify audit contravention reporting procedure follows on from the ATO’s decision to publish a checklist for SMSF auditors to reduce the need for re-reporting.