ATO monitoring auditor workload

The ATO is examining the work carried out by a decreasing pool of SMSF auditors, but has noted a high level of compliance with independence obligations introduced nearly five years ago.

ATO SMSF director Kellie Grant said the regulator’s ongoing auditor compliance program was looking at whether practitioners who do more than 1000 audits a year had appropriate controls, procedures and processes in place.

“This is important because as our current auditor population, which is currently 3760, is unfortunately decreasing, we are finding that some existing auditors are taking on more and more audits, so we see [our reviews] as an important part of our program to ensure auditors are doing a proper annual audit,” Grant told delegates at The Auditors Institute recent Auditors Day 2026 in Sydney.

“When we do those reviews, we will interview those auditors, look at the type of software they use, look at their compliance checklist to see if they are doing the relevant checks.

“We will look at their auditor contravention report lodgement rates and if we feel they are a little bit low compared to the average, we might test their knowledge on certain areas of the Superannuation Industry (Supervision) Act.

“We will also have a look to see where they are undertaking independence checks and if they have any independence issues, and make sure they are doing their annual ASQM 1 review.”

In regards to independence, she added the ATO was seeing very few “blatant independence risks” where it was not possible to put safeguards in place, such as auditing your own fund or auditing a fund of an immediate family member or business partner.

“It’s great to see those hardly exist anymore. I don’t think I have seen someone that has audited their own fund in some time and the same applies with reciprocal audits,” she said.

“Back in 2019, that risk was sitting at around 600 auditors conducting those sort of audits per year. This year we have only found around six based on the annual return data that comes in. It is good to see some of our messaging is getting through.

“However, our data still indicates there are around 650 auditors who could potentially be doing in-house audits when they should have stopped that back on 1 July 2021. It was around 800 in March last year so it looks like it has come down, which is good.

“If we find these auditors are reviewing their firm’s non-assurance work, such as the preparation of funds’ financial statements where that preparation isn’t considered routine or mechanical, and the firm retained management responsibility, we will refer those auditors to the Australian Securities and Investments Commission.”