In theory, SMSF auditors should always be independent.

But it took the APES 110 update in May 2020 to enshrine this in professional practice. With the full backing of all the professional bodies and enforced by the ATO.

So, one year after it came into effect on 1 July 2021, where are we?

1. The siren call of cheap

We have had numerous accountants bemoan the seductive lure of cheap.  

A significant mismatch of expectations around service and quality causing frustration. 

Inevitably cheap is expensive. Client frustrations around long lead times, and examples of complete rework. The hidden costs of quality control, and workflow management.

2. Audit pools – a good idea; beware underwater snags

On first appearance, audit pools appear to be a great way for accountants to preserve fees. But as with cheap, it is important to be clear about your expectations up front.

• Agreed fixed pricing

Sounds good – until you get an audit of a $10M fund with overseas assets, fishing licenses, and property developments. At that point, you are in a massive loss situation with large valuation and compliance issues.

And the ATO scrutinises a fee-to-complexity ratio. They want to make sure your audits are thorough.

The whole situation exposes you to significant risk.

• A lack of respect

Several accountants have complained about being treated as outsourced clerks. “There’s no relationship or even a care factor, it was a cold transaction; they only cared about their fees.”

3. The Great Auditor Resignation is real

Since May 2020 over 200 auditors have left the industry.

Some left because of ATO actions taken to enforce APES 110. Many others because it is all getting too hard.

SMSF audits can be complex, with a continuous stream of rulings and regulations to be across, greater regulator oversight, and subject to increasing litigation. Little wonder our PI insurance is going through the roof.

4. SMSF Auditing is becoming a specialised profession

The SMSF Auditing profession is growing up.

Part-time auditors are leaving because of the rigours and demands of the work. Businesses are specialising in just SMSF auditing.

It will raise the quality of the work being done. And increase expectations of trustees to have their affairs in order.

TriSuper Auditors takes our auditing role role seriously. It matters to your clients.

We are an Australian-based SMSF auditor focussed on serving small accounting firms. Trained accountants ourselves, we understand your world and fit in with your business process and practices. To create a simple, easy process.

That is all we do. Audit self-managed super funds, well. Call us on 1300 874 787 today.