News

ATO, Auditing

Audit compliance to be enforced

auditor report compliance

The ATO will be enforcing compliance in the new financial year as changes to the SMSF independent auditor report (IAR) are made.

The ATO has released a new version of the SMSF independent auditor’s report (IAR) form, which must be used for any audit completed on or after 1 July 2021, regardless of income year.

The new IAR form will include changes to Part A: Financial Audit and Part B: Compliance Audit and two additional paragraphs to outline the importance for auditors to comply with the APES 110 Code of Ethics for Professional Accountants.

To allow auditors time to transition, the ATO has stated that during July it will not take any compliance action in the circumstances where auditors use the outdated IAR version, which will be removed from the regulator’s website at the end of July.

In a separate announcement, the ATO said it will begin enforcing the Code of Ethics in regards to independence standards that impact in-house audits where an audit is completed after 1 July 2021, and enforcement will apply to audits completed for 2020/21 and future financial years, as well as any audits that are completed for earlier financial years.

The regulator pointed out it had taken a transitional approach to compliance in the current financial year after the independence standards in the code became effective on 1 January 2020, and warned approved SMSF auditors breaching the standards after the commencement date will be referred to the Australian Securities and Investments Commission (ASIC) for further action.

It also noted that while the personal transfer balance cap will be indexed from 1 July, updated figures will not be available until 5 July through its website as it would not be processing reports from 1 July to 5 July 2021, however, tax agents could view this information in the Online Services for Agents portal.

“This means we will be unable to issue or revoke excess transfer balance determinations we have sent to a member or commutation authorities we have sent to a fund,” it said.

“No commutation authorities have been issued to any APRA (Australian Prudential Regulation Authority) funds with a due date between 1 and 12 July 2021.”

Copyright © SMS Magazine 2021

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital