The ATO has provided an update on the state of SMSF auditors, revealing practitioner numbers have rebounded after they had significantly receded over recent years.
“[Auditor numbers] is an area that has had a lot of attention throughout 2022 and 2023 where we saw a decrease in auditor numbers. Now the reasons for that reduction could be a variety and many. It could have been from the changes to the independence [requirements], which came into effect from 2020,” ATO acting deputy commissioner Paul Delahunty noted during the most recent Auditors Institute member webinar.
“[But] turning our minds to where things are situated [in 2024] and what we’ve observed is that there has been a fair amount of stability in overall auditor numbers.
“The population is sitting at around the 4100 mark at the moment and has been stable for a little while now.”
Delahunty pointed out not all of these registered practitioners were actively servicing clients.
“I think we’re in the vicinity of around 3300 auditors who are actually active in signing off on audits in the 2022 year. Obviously there are a number of auditors who take on roles as employees in larger firms under the supervision and direction of other SMSF auditors, but 4100 is the total number [currently],” he said.
He took the opportunity to remind auditors of their professional obligations regarding independence and what the ATO’s compliance expectations are in this area.
“Our expectation at the moment, which has been in place since 1 July 2021, is for firms that have these arrangements [where they are performing both SMSF audit and non-assurance work for the same client] have restructured to ensure they meet the independence requirement,” he confirmed.
Further, he stipulated compliance with the independence standard will continue to be an area of focus for the regulator in 2025.
“What has happened in the last financial year is that we did refer a number of auditors to ASIC (Australian Securities and Investments Commission) where we identified they hadn’t restructured in line with current expectations,” he said.
“So we’re going to continue with this program of work this year as we still have a fair bit of intelligence to suggest that there are a number of auditors that are maintaining in-house arrangements despite the protest we’ve brought to this risk.”
