The ATO has stated SMSF auditors charging low fees is an area of concern and remain under examination, but those choosing to exit should do so by correct channels.
ATO SMSF director Kellie Grant said low fees may be indicative of a poor-quality audit and some were even being conducted below the average cost level of $550.
“We certainly are seeing funds being charged way under that. That’s a red flag for us,” Grant told attendees of a recent online presentation hosted by The Auditors Institute.
“We look at that as a risk when we pick up auditors that we want to review to see if they’re doing a quality audit,” she added
“How can we ensure a fair fee is tendered? We haven’t got any control over ensuring what auditors charge, but we certainly tell them if you’re going to be charging a low amount on audits, you will be exposing yourself for a review from the ATO.
“We are in the process of trying to change the SMSF annual return so the auditor fee label does become one where tax agents and trustees have to put a fee.
“At the moment it’s being left blank by some funds and so it can be difficult for us to pick up the audit fee for all funds, but we will be changing that to ensure that that no longer happens and we can pick up any risks.”
According to Grant any auditors who no longer wish to service SMSFs should deregister rather than letting the Australian Securities and Investments Commission (ASIC) automatically cancel their registration.
“It costs $193 for the deregistration fee, which has reduced a lot as it used to be $900 and you can organise that by logging on to the ASIC portal,” she noted.
“What we do find is if auditors don’t voluntarily deregister, it’s a matter of time before we refer them to ASIC for not [performing] audits and then ASIC might initiate the cancellation themselves, [and] if [that happens], it will notify your professional association.
“It’s not really a strategy to hold out waiting for ASIC to cancel your registration because of that particular reason, so it’s best if you don’t feel like you need to do auditing anymore, to voluntary deregister yourself.”
