The ATO has found auditors are confused about where to report contraventions in the auditor contravention report (ACR) and are misreporting issues of concern in the wrong places while warning SMSF trustees to comply with annual report lodgement deadlines.
In an update on its website, the regulator stated it had found some auditors were unclear on how to use sections E and G of the ACR when lodging.
Section E is where auditors must report contraventions of the regulations listed in tables 1A and 1B, according to the instructions provided in those tables, while section G is exclusively for other contraventions that are not listed in the tables.
The ATO reminded auditors that completing section G was not mandatory, unlike section E, but it does allow them to report repeated contraventions of non-reportable sections or regulations and questionable conduct of a trustee, tax agent, administrator or previous SMSF auditor.
At the same, it stated it was targeting any failures to lodge an SMSF annual return (SAR) and would be issuing final warnings to SMSF trustees with outstanding lodgement years.
The warning would go to those funds that have received two notifications of their failure to lodge an SAR, and the third and final warning will be delivered via mail to each SMSF trustee’s postal and business address.
If non-compliant, the ATO warned trustees will be in breach of their SMSF obligations under the Superannuation Industry (Supervision) Act 1993 and will be at risk of being disqualified and having their SMSF registration cancelled.
In the case of special circumstances, it said if an immediate SAR lodgement is not possible, trustees will need to provide a written response explaining why the SMSF in question should not be disqualified.
