The SMSF Association has revealed it has sought to secure an extension for the deadline by which auditors are required to comply with the amended independence standard defined by APES 110.
“Some [of our members] are concerned with the time frame. They said they don’t feel that there is enough time to make the changes they need and that’s why the association has been pushing for a longer lead-in time,” SMSF Association deputy chief executive and policy and education director Peter Burgess confirmed during an industry roundtable last week.
“We believe [the change] is going to be very disruptive for the industry. We’ve heard of figures [indicating] around 40 per cent of self-managed super funds have their audits performed by a mid-tier accounting firm [that will be affected by these changes], so that suggests to us that this is going to be very disruptive for the industry.
“So it’s important we do have a long lead-in time that will allow firms to make the changes they need to make.”
Currently, all accounting firms are required to ensure they comply with the amended auditor independence standard by 1 July.
Burgess pointed out even if this deadline is not moved, he is confident accounting firms will not be severely penalised if they have not implemented all of the processes necessary to ensure compliance with the amendments made to APES 110.
“The ATO has made it clear that from July this year they are looking to apply the new rules, so they’re going to move from their education mode at the moment to enforcing [the changes] from [that date],” he noted.
“Having said that, we would expect the ATO to be taking a lenient approach to those firms that have made a genuine effort to comply [with the amended standard].
“Certainly that’s what the ATO has said to us that they’ll be looking for firms that made a genuine effort to comply, and where they don’t see firms that have made a genuine effort, that’s where they’re more likely to take a harsher approach, such as referring them to ASIC (Australian Securities and Investments Commission) for further action.”
The ATO outlined its compliance approach to the amended auditor independence standard in October last year.