Auditing, Compliance, Tax

Tax agents terminated for false SMSF audits

tax agents smsf audits

The Tax Practitioners Board has terminated the registration of two tax agents for dishonest conduct in regard to the veracity of SMSF audits.

The Tax Practitioners Board (TPB) has terminated the registration of two tax agents for lodging SMSF annual returns with false information in relation to the annual audits of the funds.

The TPB took the action after receiving a referral from the ATO and found the two tax agents had lodged incorrect details about numerous SMSF annual audits, falsely stating they had been completed.

According to the board, one of the tax agents lodged over 90 SMSF annual returns for more than 20 clients, including falsifying auditor details indicating the funds had been audited, but the auditor advised they had not audited the funds.

In this case, the tax agent was also found to have misled clients by advising them their SMSFs had been audited and charging them for the audit, even though an audit had not been completed.

Both tax agents were found to have acted dishonestly and have been banned from practice as they no longer meet the tax practitioner registration requirement of being a fit and proper person.

TPB chair Ian Klug said: “This decision serves as a warning to other tax practitioners who may be thinking of engaging in this kind of egregious behaviour.

“Our decisions reiterate the importance of the relationship between the TPB and the ATO in ensuring that tax practitioners maintain a strong level of integrity in their lodgement activities.

“Registered tax practitioners are in a privileged position of trust and it is essential that they ensure their actions uphold the integrity of the tax and superannuation systems.”

The ban was also welcomed by ATO SMSF risk and strategy assistant commissioner Justin Micale, who said the action was the result of ATO compliance activity where it worked with SMSF auditors to identify if their auditor numbers were being deliberately misused.

“The SMSF annual audit is a critical integrity check to ensure the validity and accuracy of an SMSF’s financial statements and its compliance with superannuation legislation and regulations,” Micale said.

In October, the ATO will be sending client lists for the 2022 financial year to all SMSF auditors where they can report to the regulator the details of any funds where their SMSF auditor number has been reported, but no audit activity has been undertaken.

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