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Crack down on auditor independence by ATO for 2016/17 FY

The ATO has been clear that risks to independence are a focus in the 2016-2017 financial year, as is the assurance that SMSF auditors are complying with all of the independence requirements set out by the APES Code of Ethics for Professional Accountants.

Here are a number of key threats to auditor independence which are being focused on by the ATO in the current financial year:

Self reviews
This is the threat of an SMSF auditor who also acts as a tax agent for the fund. Self-reviews are a threat to independence and auditors are required to safeguard independence and remove themselves when they are concerned about compliance.

Reciprocal audits
The process where an auditor will audit their auditor’s fund. This process can lead to self-interest threats and creates a disincentive to question the other practitioner’s work. ASIC and the ATO have an issue with reciprocal audits and require a third party that is independent to undertake an objective audit.

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SMSF trustees exposing themselves to compliance risks by using personal bank accounts

A recent article in SMSF Adviser has provided an overview of the issues some SMSF trustees are facing by exposing themselves to potential compliance risks by paying fund expenses from their personal bank accounts.

SMSF trustees should be aware that there are severe consequences should these payments not be rectified before the fund is audited. While some of these funds might be only small amounts when it comes to audit time, they usually reach a reasonable amount and as such, they need to be paid out of the fund rather than a personal bank account. 

While it can often be an honest mistake, if the issue continues to occur then it can become a compliance issue for SMSF trustees. 

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Ensuring there are no breaks in the SMSF Documentation Chain

It’s important to be aware of the fact that any weak links in your client’s SMSF documentation chain could break their entire estate plan.

SMSF specialists have a duty to keep things on track and ensuring estate planning documentation is in order is essential. 

It is critical to review all of the documentation for the SMSF, not just the deed but the entire chain of documents. While the trust deed is important, it is important to check the previous documents to ensure there are no issues in the paper trail and the latest documents are valid if changes have been made.

What documents should be in your SMSF estate planning file:

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Reasons why you should stop multi-tasking at work 

If you're the master of doing 10 things at once or you're focused on increasing your productivity by trying to work simultaneously on tasks, it could be working against you in your work life.

A recent study released by Stanford University has revealed that multitasking can actually add stress to our lives and negatively affects our mood and productivity.

Particularly in the digital space, individuals can be bombarded with lots of information and try to switch from one task to another rather than focus on one task which can have a negative effect on their ability to get things done. Rather than multitasking people should be single tasking in the workplace.

Reasons why you should consider single tasking at work:

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