SMSF auditors with clients who became a trustee more than 10 years ago, but cannot supply their declaration should consider notifying the ATO of that fact via an auditor contravention report (ACR), according to an SMSF lawyer.
DBA Lawyers special counsel Bryce Figot said the ATO’s recent program of auditing approved SMSF auditors has focused on issues such as evidence for a market valuation, but also includes any failures to check if trustee declarations have been signed and retained under section 104A of the Superannuation Industry (Supervision) Act.
“This has nothing to do with market valuations, but if you’re an approved SMSF auditor, this is highly relevant,” Figot said during a recent online briefing to members of The Auditors Institute.
“If someone became a trustee or director of a corporate trustee on or after 1 July 2007, even though it’s more than 10 years, you still want to be able to see that trustee declaration.
“The ATO are upset with auditors who have not been seeing that declaration and if your defence is ‘but it happened more than 10 years ago’, too bad, the ATO don’t accept that as a reason.”
He added that where an auditor was appointed more than 10 years after the trustee was appointed and there was no way to find or view the original trustee declaration, the regulator should be notified.
“The ATO has clarified this issue in April this year and said that if an ACR has already been lodged [notifying it of the absence of the declaration], that is fine, it’s won and done,” he said.
“If no ACR has ever been lodged and the trustee has lost the originals, lodge an ACR and you only need to do that once.
“I suppose this would be a problem if you get a new client, they have lost the trustee declaration and are unsure if the ATO has been told before.
“I would be inclined to lodge an ACR, but I am not an auditor.
“Whether or not you choose to take a commercial risk is up to you, but I would advise you to keep life simple and lodge an ACR.”
