A senior SMSF executive has warned practitioners finding a practical solution to satisfying auditor requirements with regard to a client compliance breach may not always be possible, meaning the situation in question may have to be managed in a less convenient manner.
Accurium senior SMSF educator Anthony Cullen made the point after one attendee of a technical webinar held last week cited one of the biggest challenges with the annual fund audit was trying to find a work around when trustees do the wrong thing.
“As much as we’d like to help our clients, sometimes we can’t find work arounds and probably just have to tell our clients that they’ve done the wrong thing and [inform them of the potential] consequences [of their actions],” Cullen admitted during his presentation.
“We have to be very careful as professionals that we don’t go too far and put our own licences and careers at risk for the sake of trying to help our client.
“So there’s a fine line there.”
Accurium head of SMSF education Mark Ellem echoed the sentiments and suggested practitioners needed to be sensible when faced with any compliance breach.
“It is something we really need to think about [and potentially tell the client] ‘you’ve done something wrong, I can assist you in minimising what the consequences might be and penalties that might be [applicable]’, engage with the ATO with the voluntary disclosure and early engagement service it has or maybe put in a rectification plan as quickly as possible,” Ellem explained.
With reference to implementing a rectification plan for a compliance breach, he pointed out this course of action would not necessarily be as drastic as some trustees might believe.
“It may simple [involve] getting SMSF-specific advice [or] a private binding ruling [from the ATO],” he said.
Other issues practitioners nominated as being the most challenging audit issues for them were asset valuations and in-house assets.
