Auditing, Compliance, Platforms, SMSFA

Data vigilance crucial for auditors

Auditing platforms SMSF audits ASF Shelley Banton

SMSF auditors must exercise due diligence in evaluating both the software and data stored within automated auditing platforms to ensure compliance with their professional obligations.

SMSF auditors have been reminded to exercise scrutiny and due diligence when using auditing platforms in order to satisfy their professional obligations and maintain compliance, according to a senior SMSF auditor.

ASF Audits head of education Shelley Banton noted while technological advancements have expedited audit processes, the use of auditing platforms does not exempt auditors from ensuring the accuracy, integrity and compliance of stored information.

To that end, Banton urged auditors to evaluate whether the software and documentation they were using were compliant with the relevant Superannuation Industry (Supervision) (SIS) Act regulations and scrutinise the data contained within their chosen software solution.

“We need to assess our risks and benefits because at the end of the day you’re accepting those risks and benefits whether you do your due diligence or not. [For example], does the software comply with the SIS regulations and the auditing standards?” she told delegates at a recent SMSF Association Audit Day webinar.

“If you look at the terms and conditions of some automated auditing platforms, there’s no guarantee that the software is fit for purpose, that it’s error-free and that it’s accurate. It’s your responsibility as the auditor to download the file and ensure that it’s SIS compliant and it complies with other laws too.

“You need to get your due diligence done. It is a buyer-beware situation because you’re accepting that obligation at face value and you’re also accepting the risk of potentially signing off on incorrect financials regardless of what’s in the system.”

To illustrate her point, she pointed out the growing reliance on data feeds from auditing platforms in the industry and highlighted several considerations auditors should take into account before submitting an audit for review.

“What’s the start date of the feed? If the feed starts halfway through the year, can you rely on what is in the system up until then? We usually get bank statements up until the data feed starts because we can’t rely on that at all,” she said.

“What about if the feed drops out? It happens randomly with no real flagging about how that happens. So you need to get those bank statements to plug those audit holes for your file at that point.”

Furthermore, she said she had come across instances in the industry where incorrect information was recorded in auditing platforms, either due to automatic data entry by software or human error.

As a precaution, she advised auditors to have the June 30 bank statement and bank balance on hand instead of solely depending on data feeds and to verify the bank account is correctly named in the platform, as set-up errors may lead to inaccuracies.

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