The Institute of Public Accountants (IPA) chief executive Andrew Conway believes the government’s response to concerns from the industry indicates a lack of understanding of how SMSFs operate.
“We read glib responses made in the Government’s discussion paper that concerns ‘will be mitigated by appropriate eligibility criteria and, if necessary, transitional arrangements’,” said Mr Conway.
“Considering the concerns we have already raised along with other stakeholders, we find this statement to be unhelpful and in fact, downplays the important role that SMSF auditors perform in the regulatory oversight of trustees.”
Mr Conway believes Treasury’s sweeping statement that all concerns can be mitigated illustrates their lack of understanding of SMSF procedures and the environment that SMSFs operate under.
“There are risks that cannot be mitigated by limiting access to a three-yearly audit cycle by using appropriate eligibility criteria. One example to illustrate this point relates to ensuring assets are held on trust for the superannuation fund,” said Mr Conway.
“If the title is not in the name of the superfund, there is no safeguarding of assets held in trust to protect the assets from creditors or other claimants.
“Moving to a three-yearly audit cycle based on a good compliance track record does not show what happens behind the scenes at the desk of an auditor. Not all breaches by trustees end up being reported as contraventions, thanks to the good work of auditors,” he added.
“Many fund trustees receive a management letter from the auditor, outlining minor compliance issues, preventive advice and education advice. Without this sort of timely check and balance we fear a spike in contraventions which could have been avoided.”
CPA Australia has also indicated that it will continue to lobby against the proposals, but believes the process will be drawn out.
Super Sphere director Belinda Aisbett has also announced the establishment of the SMSF Auditors Lobby Group, aimed at opposing the proposed measure and suggesting alternatives to reduce costs for the industry.
Jotham Lian is the news editor of Accountants Daily, the leading source of breaking news, analysis and insight for Australian accounting professionals.
Before joining the team in 2017, Jotham wrote for a range of national mastheads including the Sydney Morning Herald, and Channel NewsAsia.