As in life, so in audits: you get what you pay for.
Over the last quarter of 2016 the ATO conducted an extensive review of low cost SMSF audits providers (those below $400).
As reported by ATO Commissioner Chris Jordan at the SMSF Association’s Conference earlier this month, the review identified areas of significant concern in which low cost SMSF audits did not comply with any of the standards:
- No written audit plans
- No representation letters from trustees
- Inadequate assessment of risks
- Inadequate reviewing of trust deeds and property searches.
The problem with this for accountants is that their clients, the trustees, are the ones that are exposed to any potential ATO penalties and fines.
The accountants themselves could then be exposed to a PI claim.
All of a sudden, the low cost audit is now very expensive.
Whilst technology can save a lot of administrative time, the fact of the matter is that it cannot replace the expertise and experience of an SMSF auditor.
A successful auditor needs:
- Professional expertise
- The ability to identify, understand and assess financial risk
- The ability to understand AND keep up with the ever-changing and dynamic world of ATO updates, court rulings and case law.
As always I am happy to answer your questions about this or any SMSF compliance issues you may have. Just contact me here.