ATO Audit of SMSF's
- 02 March 2018
This year the ATO intends to make the reviewing of compliance of SMSF auditors a focus. As part of the this intiative the ATO is preparing to audit around 300 SMSF audit firms over the course of the year.
To date they have already referred 30 firms to ASIC, predominantly due to concerns regarding sufficient evidence, and independence. Independence in particular has been noted as a key concern of the ATO. As a result they have requested that auditors identify threats to their independence and build in safeguards against those threats where necessary.
Some of the threats noted include the following:
- Reciprocal Audit arrangements - Where a firm audits their own SMSF auditor's fund. In both the ATO's and ASIC's view this may give rise to familiarity, self-interest and possible intimidation threats;
- A family relationship between the SMSF auditor and their referral source;
- Two partner accounting firms where one partner audits the financials prepared by the other Partner;
- Single partner firms where the staff are preparing the accounts and the sole Auditor is signing off on the accounts directly
In the context of quality and compliance, the ATO has noted that they will be looking specifically at asset valuations. This will be a critical area this year considering the changes made to superannuation law. The ATO has recommended the use of a qualified valuer for material assets or when the nature of the asset makes valuation complex or difficult .
For futher information on the ATO's website, click here.