A specialist practitioner has warned SMSF audit partners within accounting firms to be particularly mindful of the consequences of breaching the new auditor independence standards introduced in the recent amendments to APES 110.
ASF Audits head of education Shelley Banton told delegates at the final session of the 2020 Self-managed Independent Superannuation Funds Association SMSF Virtual Forum today: “One of the things we need to remember here and focus on is that it is the SMSF audit partner who is going to be referred to ASIC (Australian Securities and Investments Commission) at the end of the day for independence issues.
“It’s not [going to be] the accounting firm’s partners, so it is important [for these individuals] to make sure [their] risk and [their] business is covered.”
According to Banton, the regulator has already expressed its willingness to ensure accounting firms restructure their practices in a timely manner.
“The ATO is going to be writing to all SMSF auditors with the expectation that those independence issues get sorted and [ensure accounting firms] meet those new requirements effective from 1 July 2021,” she said.
“The ATO was going to be sending these letters out before Christmas and we haven’t heard otherwise, but let’s remember they’ve been under the pump due to COVID and they’ve also [already] released some informational guidance through their website on this particular issue.”
She recommended accounting firms act immediately to safeguard their compliance with the new standards and formulate a satisfactory outcome for their clients.
“If your firm is affected by these new guidelines, you need to act now and start engaging with an SMSF auditor in readiness for the 2021/22 financial year,” she suggested.
“The reason for that is the numbers simply just don’t add up. When you consider the number of funds that are going to need a new home and the number of available SMSF auditors, there is going to be a last-minute rush.
“[This could mean] it’s going to be very difficult trying to engage an auditor, or at least the auditor who you want to engage with, at the very last minute.
“And even if you do, you might find that the fees are a lot higher because if you’re locked in now, due to the increased demand at the end of the [financial] year, you might be in a better space,” she predicted.