Accounting, Auditing

Cheap audits lack expertise

Cheap SMSF audits

Expertise and reliability are crucial when choosing an SMSF audit service and the decision should not be based on price alone, a specialist auditor says.

Accounting firms outsourcing their SMSF audits as a result of the new auditing independence standards should avoid cheap audit services that may lack the required skills, a specialist auditor has said.

Highlighting a recent spate of ultra-cheap audits being offered across the SMSF space from companies targeting accounting and auditing firms, Elite Super managing director Katrina Fletcher warned against choosing audit services based on price alone and said expertise and reliability were key factors to consider.

“From my point of view, with the accountants that I work with, we’re not just the auditor, we’re their SMSF experts. We work with a lot of small to medium accountants and advisers and a lot of them ring us and email us [with queries]. We just give them advice as we go,” Fletcher told selfmanagedsuper.

“There’s not one day that goes by that we don’t give advice and help. I just don’t think that the cheaper auditors would even care – many of them won’t have the knowledge to give anyway.

“It’s a relationship that I think accountants need to build with their auditor. If you’re not going to pay them much, there won’t be a relationship, you’ll just be getting what you pay for.”

Pointing to the restructured APES 110 Code of Ethics for Professional Accountants enforcing restrictions on financial statements and audits being prepared by the same party, she said she was hopeful it would help to underscore the value and purpose of quality SMSF audits within the industry and for trustees in particular.

Last month, Seamless SMSF business development manager Jo Hurley noted the new auditor independence standards would help trustees see the real value of the SMSF audit process.

In October, Chartered Accountants Australia and New Zealand reporting and assurance leader Amir Ghandar said the new auditor independence standards would reinforce the essential role SMSF auditors had in protecting the retirement savings of trustees and maintaining the integrity of the sector.

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