The quality of SMSF audits has long been on the ATO’s radar, but as deputy commissioner Kasey Macfarlane signalled at yesterday’s Chartered Accountants Australia and New Zealand National SMSF Conference, the regulator will be ramping up its surveillance of auditors who are potentially not using their professional judgement with their SMSF clients.
“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.
The ATO will also be upping its surveillance of cheap SMSF audits, although Ms Macfarlane recognised that a low price point is not universally indicative of a poor-quality SMSF audit.
“There can be lots of different things at play. There’s competitive market pressures, there’s automated processes, there’s offshoring, economies of scale, which can all lead to reduced prices in the SMSF audit space. And sometimes auditors might advertise a low fee, but really there’s a sliding scale of fees as the audit gets more complex,” Ms Macfarlane said.
SMSF auditors that promise a guaranteed low fixed fee, regardless of the complexity of the fund, particularly when coupled with a guaranteed short turnaround time, raise questions with the ATO, she said.