ATO to identify auditors who report contraventions

auditor contravention reporting

New laws to protect whistleblowers will identify any auditor reporting a contravention with an SMSF to the trustees of the fund, the ATO has warned.

The ATO has reminded auditors that any reporting of infringements that are outside the list of reportable events within an auditor/actuary contravention report (ACR) will lead them to being identified to the trustees of an SMSF.

The reminder was given following changes to the Taxation Administration Act, which now includes a new section – Part IVD – that is the result of the passing of the Treasury Laws Amendment (Enhancing Whistleblower Protections) Act 2019, and offers protection to people who disclose information to the ATO.

As a result of this legislative change, the ATO stated it had made changes to the ACR, which took effect from 1 July and “have implications for SMSF auditors who report other regulatory information at Section G of the ACR”.

Section G of the ACR covers ‘Other Regulatory Information’ and includes the question: “Do you want to provide any additional information about the fund or trustees that will help us perform our functions under the Superannuation Industry (Supervision) (SIS) Act or Superannuation Industry (Supervision) Regulations?”

Instructions for completing the new ACR available on the ATO website state auditors are to answer ‘yes’ at this section if they wish to include “contraventions and other important matters you have not already mentioned in your report”, and to not include information that should be reported at Section E. This earlier section deals with actions prohibited under the SIS Act or SIS Regulations or inaction that results in the trustee not meeting their obligations under the act and regulations.

Commenting on the legislative changes, the ATO stated: “We’ve added a disclaimer to Sections G of the ACR to make it clear that when you provide information about a fund or trustee(s) at section G, you’re consenting to the disclosure of your identity to the SMSF trustee(s).”

The ATO added auditors and actuaries who did not want to be identified should instead make a voluntary disclosure via its website and the inclusion of material at Section E would not be affected by the new law.

No changes were made to the SMSF independent auditor’s report and the current version can be used for all reporting periods from 1 July 2016, according to the ATO, which recently reminded auditors of their obligations to report any contraventions they may find.

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