SMSF auditors should be prepared for the ATO to look at their worst client files and prepare their supporting paperwork accordingly, according to an audit practitioner.
Assurify managing director David Burrows said the key takeaway from ATO actions against auditors in 2025 was the regulator is targeting specific issues with practitioners but suggested they can take pre-emptive action to ensure passing any regulator review.
“It is interesting to read through those cases against auditors, and my takeaway is are you comfortable for the ATO to look at your worst audit file?” Burrows asked during an online presentation last month by The Auditors Institute.
“The ATO is targeted with the funds it asks to review and it has some data stating ‘these are the files that there might be some issues with’, so they are certainly not going to be your cleanest audit files.
“Having that mentality about what is my worst audit file, [you need to then] ask yourself [whether you] have enough information on that file.
“Cut corners at your peril because we know the ATO is looking at all of this closely, and if it gets to the Australian Securities and Investments Commission and the Administrative Review Tribunal, it makes it very difficult for you.”
Burrows noted a key failing in actions against auditors was how files were compiled, maintained and the information on record.
“The wording from one the cases was ‘the auditor failed to obtain sufficient audit evidence to support conclusions, or failed to adequately document their conclusions’.
“So another key message is to have a real focus on the evidence and file notes and apply the experienced auditor review test [that is whether] an experienced external auditor [could tell how the work was approached].
“If they can’t do that, then the ATO will have a massive struggle to [understand the process] when it looks at your files.”
