Audit checklist a competence measure

auditor client checklist

An indicative measure for accounting firms as to whether the right SMSF auditor has been appointed is if the practice is provided with a client checklist.

A technical services manager has suggested the provision a formal client checklist by an SMSF auditor can be used as a competence measure and in turn give a level of assurance the correct audit professional has been chosen to perform this annual compliance requirement.

“[The auditor] should be providing the client with a checklist that requests everything [the auditor] requires. In addition, that checklist should also ask questions about possible transactions that may require specific supporting documentation,” Seamless SMSF head of technical and training Frank La Spada told attendees at an Accurium technical webinar held today.

“What I mean by that is if the client sets up a new unit trust, they know what to give [the accountant]. If the client all of a sudden establishes an LRBA (limited recourse borrowing arrangement) or a new bank account, they know what to give [the accountant].”

According to La Spada, this will indicate to the accountant that the auditor has procedures in place to streamline the audit process by ensuring all parties know the necessary information needed to perform the function.

Further, the presence of a client checklist will prevent constant requests for information from the auditor to the accountant that could prove extremely costly for all parties in the form of avoidable downtime and stress.

La Spada pointed out auditors needed to be proactive about the use of the checklist to ensure it is used, and used properly, by the accounting firm to achieve the desired efficiency gains.

“What [auditors] need to do is actually explain the ‘why’ [behind using the checklist]. Because if you explain the ‘why’ and actually have the accounting team firm buy into the process, well then they’ve got no reason not to do it,” he noted.

“But if [the auditor] is saying this is the process and this is what we recommend, and why, because we’re a really clever auditor, there is actually no reason for the [accounting firm] to change.

“Whereas if [the auditor] words it in a way and shows the accounting firm the benefits it is going to receive from it and actually prove it too … that really helps.”

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