Compliance with the amended auditor independence standards as stipulated in APES 110 is creating a level of stress among SMSF practitioners that is leading some of them to reconsider the merit of a previously unpopular policy with regard to the fund verification process.
The sentiment was revealed during the Accurium Live Q&A webinar held last week via a question from the audience.
To this end, one practitioner asked, with support from his peers, whether the proposed three-year audit cycle was back on the government policy agenda for SMSFs in light of the challenges auditors are facing as a result of the amendment to APES 110.
“With these stronger independence rules we are finding the extra audit requirements to be particularly onerous [and] other than finding a ‘friendly’ auditor, going to [a three-year cycle] would be helpful,” the attendee said.
Accurium head of education Mark Ellem, though, said he did not think this practice would materialise.
“My understanding is [the three-year audit cycle] is not on the [policy] agenda. I think it was well and truly shot down when it was first raised. [Of course] we don’t know what the agenda is for this new government on super,” Ellem said.
“My personal view is we’re very unlikely to see three-yearly audits.”
He conceded the amended auditor independence standards have made the SMSF audit process far more onerous, but suggested a possible solution for this situation.
“[You probably need to] take this back to when you come across a client who might be considering starting up an SMSF [to commit to] educating them [about what some of the compliance] requirements are going to be,” he said.
“[This will ensure] they understand that an audit is not a simple tick and flick [exercise and] there will be [compliance] requirements depending on the different types of assets that the fund acquires.”
