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The Institute of Public Accountants has questioned ASIC’s new proposed fee hike for SMSF auditors, pointing to the $142.5 million currently collected by the ATO as a reason to further reduce fees.
Last week, the government released draft legislation on the introduction of ASIC fees-for-service, the second phase of its industry funding model.
New SMSF auditors will now face a one-off $1,927 registration fee, down from the initially proposed $3,429 last year, but still a considerable jump from the current $107 fee.
The IPA had earlier said that the revised fees were a “step in the right direction… [But] still a heck of a rise”, with chief executive Andrew Conway calling for the consideration of the ATO’s current $259 supervisory levy before any final decision is made.
“This levy was a mere $45 in 2008 but now equates to approximately $142.5 million (550,000 SMSFs multiplied by $259) to monitor the sector including SMSF auditors,” said Mr Conway.
“In 2011/12, the government provided ASIC with $10.7 million over five years, to develop and maintain an online registration system for auditors of SMSFs. ASIC also developed a competency exam for auditors, enabling ASIC to deregister non-compliant auditors.
“The government also gave the ATO $10.6 million over five years to police registered auditors, check their compliance with competency standards set by ASIC and where necessary, refer non-compliant auditors to ASIC for appropriate punishment,” he added.
“Surely, any fee increase under the proposed fees-for-service funding model must take into account the money already being collected via the ATO supervisory levy.”
Mr Conway has further questioned the justification of the fee increase, considering the decline in SMSF auditors in the market, and a concentration of those services amongst the major players.
“While we understand the objectives of a new funding model and the role of ASIC, we have a major concern over any impact these fees will have on competition, especially when there has already been a decline in the number of SMSF auditors in a market which is being dominated by the major players,” said Mr Conway.
“While the new proposed fee has been reduced to $1,927 is a step in the right direction, it is still far too high and will only deter new entrants into the SMSF auditor market.
“We look forward to the next round of consultation to get ASIC funding and resourcing right.”