The Institute of Public Accountants (IPA) has warned the federal government it is putting the SMSF sector at risk of increasing contraventions with its proposal to change the annual audit requirement to a three-yearly cycle.

The Self-managed Independent Superannuation Funds Association (SISFA) has responded to the federal budget proposal for three-year SMSF audits by creating an entirely new class of membership to represent the interests of specialist SMSF auditors.

The proposed three-yearly audit for SMSFs will shrink auditor numbers, forcing many to leave the industry as practitioners will simply not be able to manage the smaller volume of work over a longer cycle, an SMSF audit specialist has warned.

The triennial audit proposal for clean SMSFs combined with continuing fee pressures has created an opportune period to educate trustees on the value and importance of the audit function.

The federal government’s 2018 budget measure to allow SMSFs with a good compliance and record-keeping history the ability to switch to a three-yearly audit cycle will potentially increase costs for trustees and make the audit process more burdensome, according to an auditor.

Arguments the federal budget measure to allow SMSFs to switch to a three-year audit cycle will reduce compliance costs are myopic, according to an accounting body.