The ATO has warned SMSF auditors to ensure trustees have not encumbered any assets with charges as part of the annual audit process after noting some practitioners have been failing to do so.
In an update on its website, the regulator noted its compliance investigations have unveiled a pattern of auditors failing to collect sufficient audit evidence to verify fund assets remain free from any charges and emphasised the need for them to provide proof of their clients’ compliance with Superannuation Industry (Supervision) (SIS) Regulations provisions.
“Compliance cases over the last 12 months have identified that a number of auditors have not been gathering appropriate audit evidence to confirm assets held by a fund are not subject to charges,” it said.
“Referrals to ASIC have also included auditors who, amongst other issues, have failed to identify or report contraventions of regulation 13.14 of the Superannuation Industry (Supervision) Regulations.
“For audits of funds that hold property assets, auditors should obtain and hold appropriate evidence to confirm the fund has complied with regulation 13.14 of the [SIS Regulations].”
The regulator advised auditors to include a trustee’s written statement, along with reviewing property titles for any claims on real estate and checking the personal property securities register for potential interests in other SMSF assets, as part of the required evidence.
It directed auditors who may require assistance to the compliance audit information guide on its website.
Earlier this year, the ATO issued a similar warning to auditors and trustees, flagging the issue as one of its compliance risks.