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Non-independent SMSF auditors under attack!

Trick or Treat …. the ATO is knocking at the door ….

Assistant Commissioner for the Australian Taxation Office Kasey Macfarlane outlined at a recent conference the ATO’s 2015/16 targets for compliance and audit action.

In particular, special attention was drawn to the ATO’s strong focus on SMSF auditor independence.

They will focus on:SMSF Auditor independence

  • data showing a personal or business relationship between the auditor and any of the trustees
  • the auditor also providing accounting services to the super fund. The ATO will target 1000 auditors this year who fall into this category. Last year the ATO de-registered 473 auditors – many of whom fell into this category
  • reportable regulatory breaches that were not identified and/or reported by the auditor; this can arise from ATO fund audits as well as intelligence from internal and external sources
  • analyses of ATO data on the SMSF auditor and the clients they audit which identify risks such as low auditor contravention report rates when the clients audited have indicators that show a high likelihood of contraventions.

We (and increasingly the ATO) continue to stress the importance of the SMSF audit. It is not just a tick and flick…

Recent cases involving very significant penalties for trustees highlight the tougher stance being taken on compliance breaches.

These breaches could have been identified and rectified as part of a good SMSF audit process – before the ATO had a chance to become involved.

Other areas of focus for SMSF compliance and audit action by the ATO this year include:

  • individuals who enter the sector with poor personal taxation lodgement histories and no or limited income
  • SMSFs with overdue annual returns
  • breaches reported in auditor contravention reports that have not been rectified
  • SMSFs that have significant changes in assets and income, outside the previous pattern of the fund and without obvious reason
  • possible non-commercial related-party investments or transactions
  • non-compliance with pension rules
  • inappropriately claimed tax deductions when a fund is in pension phase.

Do you have any concerns as to whether your audits are being completed independently? TriSuper Auditors is happy to receive your call 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


or 02 4961 2788

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