With ASIC having an online register of all registered SMSF auditors as well as a list of those suspended, pressure is on for auditors within the industry to make sure all superannuation laws, regulations and codes of practice are carried out precisely.
ATO is currently working with the Tax Practitioners’ Board (TPB) and ASIC to establish clear boundaries and are looking at the various threats to independence as outlined below.
Reporting an irregularity within a company fund, especially if this is an auditor’s only or largest client puts the auditor in an invidious position – by obeying the law he could also be putting himself out of work. The same dilemma is placed on an auditor who obtains referrals from a large client. Reporting an irregularity in that client’s fund is likely to cause the cash cow of referrals to dry up.
Close personal relationships with the trustees, the accounting team or members of the fund being audited calls independence into question, particularly if it is a family or business relationship. This also holds true for staff who have left a company to begin their own practice then go back to perform an auditing function - reporting former colleagues just doesn’t seem “cricket”.
An article in SMSF Adviser outlines that time is running out for the ‘rogue’ SMSF auditor as the ATO clamps down on any conduct that is not compliant. Advisors must refrain from giving financial advice to a company and should not take a hand in preparing accounting records for the fund, as accounting and auditing functions have to be kept strictly separate – even in small firms – to ensure independence.
All SMSF auditors need to identify potential threats to independence, carefully evaluate them, put safeguards in place, and document them in the audit report to ensure compliance.
For more information have a chat with one of the team from SAAS Audit or visit our website www.saasaudit.com.au
SAAS Audit are a truly independent firm. We do not provide any administration, financial planning or business advisory services ensuring complete independence for your client.
