At the CA Australian & New Zealand SMSF conference Assistant Commissioner Kasey Macfarlane announced that the ATO will be increasing its vigilance in three key areas:
- Cheap price audits
Whilst recognising that low prices need not compromise the quality of work the ATO has a number of red flag concerns:
- Low fixed prices – irrespective of the complexity of the work involved
- Heavy reliance on automation
It is crucial that auditors have the time to apply their skills and judgment to the numbers and processes that make up a proper audit.
- Reciprocal audits
This occurs when two SMSF auditors audit each other’s funds. Whilst not explicitly breaking the independence guidelines, the ATO and ASIC are concerned that issues of familiarity and potential threats may well in fact compromise the independence test.
These auditors are being advised to desist from the practice and will be closely monitored.
- Two partner practices
Again there are significant concerns about SMSF auditor independence wherein one partner audits and one partner provides the accounting compliance. The ATO will continue to monitor these firms to ensure there are sufficient safeguards in place to ensure independence.
As with all ATO breaches the consequences can carry significant penalties.
If you have any concerns as to whether your audits are being completed independently, just call us to run through our SMSF auditor independence checklist and discuss any other pressing issues. We are here to help…
If you would like advice please contact Joel Curry directly on
1300 TRISUP or 02 4961 2788
Or read more about the ATO’s focus on auditors here.