New service to expose poor-quality audits

New service to expose poor-quality audits

The ATO’s voluntary disclosure service is a potential trap for auditors who fail to meet professional standards, an SMSF auditor has warned.

The voluntary disclosure service, set to launch next month, has been designed for trustees with serious breaches of putting the future of the SMSF at risk.

SMSF trustees who use the service – which requires a full disclosure and a proposed resolution from the trustee – will not be subject to the most severe penalties including prosecution, non-compliance and disqualification.

SuperAuditors director Shelley Banton told SMSF Adviser that when trustees submit a voluntary proposal to the ATO through this service, the proposal must indicate whether an SMSF auditor was appointed to audit the fund, and also whether the SMSF trustees were advised of the breach.

Auditors who have failed to identify the breach and therefore advise the trustees of the breach are likely to come under close scrutiny by the ATO, Ms Banton warned.

“The ATO may look at that and follow up with those auditors who potentially haven’t found that particular breach, and go back and review their audit findings to find out why the trustees weren’t advised about that in the first place,” she said.

“If in fact the auditor was appointed and the trustees weren’t advised of the breach, surely that’s an area the ATO would be looking to address with those SMSF auditors.”

The ATO may then refer those auditors to their professional association or to ASIC, depending on their findings.

Ms Banton said she believes the disclosure function will result in a positive outcome for trustees who decide to take advantage of the service.

“I think the ATO is on the right path to getting trustees back to being compliant,” she said.

New service to expose poor-quality audits
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