The manual reconciliation process for SMSF auditor numbers (SAN) is a step in the right direction, but the SMSF industry needs a better system for the protection of auditors and preventing SAN misuse, a specialist auditor has said.
Pointing to the ATO’s recent investigation into SAN misuse, Saul SMSF director David Saul said SMSF auditors had long-held concerns regarding the lack of an effective reconciliation process for SANs and called for an improved system to protect the SMSF auditing profession from falling victim to a “catfish-like false portrayal of identity”.
“Although the current manual reconciliation process is inefficient and needs improvement, it is better than the previous situation where an auditor remained unaware of how and when their SAN had been used,” Saul said in a blog post on his website.
“Surely in a post-royal commission environment, greater care, accuracy and honesty is required across the industry. Systematically, the potential for auditor numbers to be used without the authority of the auditor must be stopped. Quality, independent audits are a cornerstone of a sustainable SMSF industry.”
Accounting firms needed to take a more proactive and positive approach to compliance in order to help prevent fraudulent activity such as SAN misuse from taking place, he added.
“Importantly, compliance needs to be seen – not as a burden/cost centre – but rather in playing a valuable role in protecting retirement savings and also protecting the brand reputation of accounting firms,” he noted.
In February, ATO SMSFs approved auditors portfolio superannuation director Kellie Grant said less than half of SMSF auditors had responded to ATO requests to report SAN misuse, but the regulator had increased its enforcement action based on the information received.
Last month, the ATO referred nearly 90 tax agents to the Tax Practitioners Board in relation to behaviour around SAN misuse as it continued to investigate around 500 instances of misuse reported by auditors.
