Auditors on notice as ATO clamps down
The ATO has put SMSF auditors on notice, warning it will be ramping up its surveillance activity on quality and independence this financial year.
According to deputy commissioner Kasey Macfarlane, one of the ATO’s significant areas of focus for 2016-17 will be SMSF audits with cheap price points relative to the rest of the industry.
Those auditors who promise a guaranteed low fixed fee, regardless of the complexity of the fund, particularly when coupled with a guaranteed short turnaround time, is of concern to the ATO.
One emerging issue the tax office is also concerned about is auditors who are relying too heavily on automation to complete their SMSF audits.
“What would concern us is if we see SMSF auditors not necessarily providing their skill and judgement, just relying on the automated process to do the finance checks, and then not actually turning their mind to the regulatory issues,” Ms Macfarlane said.
Reciprocal audits are also putting the ATO on alert, due to concerns it will threaten SMSF auditor independence.
“So you’ve got two SMSF auditors, they have their own SMSF and they come to an arrangement to audit each other’s fund,” Ms Macfarlane said.
“Now that isn’t specifically covered in independence guides or standards. But ATO and ASIC’s view is that there are clearly, in that situation, issues of familiarity, potential threats and intimidation that [can’t] be safeguarded against.