ATO, Auditing

ATO still finding issues with auditors

ATO SMSF auditors

An ongoing review of SMSF auditors by the ATO has continued to find concerns with their practices, with some being referred to ASIC for further action.

The ATO is continuing to find problems with SMSF auditors, with the second stage of its review of the top 100 auditors resulting in more auditors being referred to ASIC.

ATO SMSFs approved auditors portfolio superannuation director Kellie Grant said the review, which last year referred two SMSF auditors to ASIC, had referred a further four auditors from a batch of 18 that had been reviewed so far.

Grant said the ATO was surprised by the issues it was finding among the top 100 group given the amount of SMSFs audited by it.

“When we embarked on that program of auditing the top 100 auditors, we did so because they audit around 35 per cent of funds and we wanted to make sure they were doing a good job,” she said during her presentation at the SMSF Association 2020 National Conference on the Gold Coast last week.

“We were surprised that out of the 51 we reviewed last year that only 10 were fully compliant, 36 received education outcomes and two were referred to ASIC.”

She added ASIC had already acted on the two referred auditors, with conditions imposed on one and the other being suspended.

“Of the audits we have done this year, and we are hoping to complete that program this financial year, we have completed 18 and another four auditors have been referred – two of them because they are doing 2000 audits each but only have one referral source, which we think is a big independence issue,” she said.

Of those auditors who received education outcomes, she said they did not warrant referral to ASIC because the ATO did not find consistent issues across the three files that were audited.

Rather, those issues were minor and included references to outdated regulations or a failure to provide key pieces of evidence to ensure a fund complied with regulatory obligations, she noted, adding the ATO would conduct a further review in two to three years’ time to ensure their practices had improved.

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