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  • 17 July 2018

    Meeting held on 17 July 2018.

    The information provided below is a summary of topics discussed at the meeting.

    Super new measures

    What are SMSF auditors seeing to date

    The ATO provided an overview of the implementation of the recent superannuation reforms, focussing on the processing of TBAR lodgments and ETB determinations.

    There was a query whether any further extension to the due date for the 2016-17 SMSF annual return (SAR) was being considered. The ATO advised there will be no further broad extension but tax agents can request extensions in the usual way, through their portal.

    ATO compliance program and treatments

    The 2017–18 compliance program resulted in a significant increase in the number of approved SMSF auditors (59) referred by the ATO to ASIC, from 22 referrals in 2016-17. The main issues identified were independence, audit quality and competency. The issues identified in the referrals were:

    • 50 with independence issues
    • 42 with insufficient audit evidence
    • 29 who failed to lodge a reportable contravention.

    This generated discussion about independence issues which are an ongoing risk area and that there may be a need among members for more guidance about what is acceptable and what is not. The ATO referred to the AUASB guidance GS 009, which gives clear explanations and examples of breaches of independence.

    It was agreed that reciprocal auditing arrangements, where two approved SMSF auditors audit each other's SMSF, are a clear breach of independence and that all stakeholders, including the professional bodies, need to clearly communicate and support the standards.

    Misuse of SMSF auditor numbers (SAN) continues to be an issue and the ATO has referred some tax agents to the Tax Practitioners Board. The associations are also very concerned about SAN misuse. The ATO can provide approved SMSF auditors with a list of SMSFs who have reported their SAN in the SAR.

    Overview and activities of AUASB

    The Auditing and Assurance Standards Board (AUASB) attended its first meeting and provided an overview of its role. The AUASB is an independent body that reports to Treasury and welcomes feedback and practical observations from professional associations, the ATO and ASIC on the audit standards.

    ASIC update

    ASIC noted that other than independence and audit quality issues, it has been seeing insurance and CPD issues.

    Last year ASIC received many voluntary cancellations which were considered by ASIC and then accepted. ASIC decisions are reviewable and last year there were 30 decisions that were reviewed by ASIC, two were then reviewed by the AAT and one of those was upheld.

    ASIC has developed an enforcement report, currently in draft, which includes statistics and case studies. A link will be provided for the group to access the ASIC enforcement report when it is publicly available.

    ASIC is also shifting its registrations systems of surveillance to a new platform. There will be one platform across various types of work, to be rolled out in October 2018. Forms have been revised as part of it. A key change is that it will be easier to send documentation to ASIC and to therefore support auditors.

      Last modified: 23 Nov 2020QC 55831