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ATO, Auditing

Latest ATO mail-out reveals more SAN misuse

The ATO has uncovered over 700 instances of SMSF auditor number misuse relating to SMSF annual returns for the 2019 financial year.

The ATO’s latest SMSF auditor number (SAN) misuse mail-out has uncovered over 700 instances of SAN misuse.

In an update on its website, the regulator stated it received a response from 41.38 per cent of the 4899 auditors it contacted regarding their client lists for the 2019 SMSF annual return (SAR), which included a total of 479,635 funds that lodged their SAR up until 19 August 2020.

Of the auditors who responded, 190 confirmed they had found one or more funds in their client list that they had not completed an audit for, resulting in 703 instances of SAN misuse involving 357 tax agents.

“The mail-out aims to identify the incorrect reporting of SMSF auditor details on the SAR, including where the SAR is being lodged prior to audit completion,” the regulator said.

“These 703 instances of SAN misuse will now be investigated to determine whether the reporting was inadvertent or deliberate.

“The response rate is already higher than the response rate from the 2018 mail-out. Compared to the 2018 mail-out, whilst the instances of SAN misuse have declined, more auditors have reported the incorrect reporting of their details, involving an increased number of tax agents.”

The ATO noted it received advice from auditors citing 8316 audit date changes, most of which were found to be administrative errors, with very few occurring after the date of lodgement.

“We are also concerned about the significant number of audit date changes reported by auditors. SMSF annual return preparers must exercise more care when completing SMSF auditor details to avoid making errors,” it said.

It urged auditors who had not yet responded to the latest client list mail-out to contact the ATO even if they found there had been no instances of SAN misuse.

During the recent 2020 SMSF Trustee Empowerment Day hosted by selfmanagedsuper sister publication smstrusteenews, ATO SMSF segment acting assistant commissioner Stephen Keating said SMSF trustees had a responsibility to ensure their fund had not been victim to the misuse of SANs being perpetrated by some service providers in the sector.

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