• SMSF auditor webinar – September 2015 update

    This webinar discussed:

    • changes to the SMSF auditor industry since registration commenced
    • our role post-registration
    • our SMSF auditor compliance approach
    • auditor reporting
    • emerging compliance issues.
     

    See also:

    Your questions answered

    The following questions were commonly asked during the SMSF auditor webinars we ran in September 2015.

    The questions have been separated into the following categories:

    ACR lodgment and reporting

    I have lodged an ACR for an SMSF. How do I find out what action has been taken by the ATO?

    We are bound by the privacy and secrecy provisions of the law we work under. As such we are not in a position to provide any information to the SMSF auditor around compliance outcomes for an SMSF.

    We can communicate certain information to the authorised contacts for an SMSF. Auditors should consider independence issues that may arise before offering other services to the fund.

    Is it necessary to lodge an ACR if the contravention has been rectified when the audit was completed?

    You must report all contraventions that meet the reporting criteria in the ACR, even if they were rectified at the time the audit was conducted. At question 16 on the ACR, you should state that the reported contravention has been rectified.

    Do I need to lodge an ACR when the trustees have rectified the previously reported contravention and the fund was audited by ATO as well?

    Whether there has been an ATO review of the fund or not, the auditor still has an obligation to report contraventions when the reporting tests have been met. The tests if followed will allow for consistent reporting of ACRs. We use ACR data for ongoing analysis, and risk identification, for both SMSFs and SMSF auditors.

    Will it be compulsory to use eSAT for ACR reporting?

    ACR lodgment through the business portal is being removed by July next year. Paper or eSAT lodgment will be the only lodgment channels. While it will not be compulsory to use eSAT it is our preferred lodgment channel. Over.85% of ACRs are lodged through eSAT and more than1,600 auditors are actively using it.

    SAN misuse

    Why does ASIC publish the auditor’s SAN?

    ASIC publishes the auditor’s name and SAN so trustees can compare details advised by the auditor and supplied on the audit report with the ASIC register to confirm their auditor is registered.

    If you believe that your SAN has been misused, contact the SMSF Auditor team mailbox SMSF auditorteam@ato.gov.au

    Auditor independence

    How do large accounting firms show their auditor independence when the firm provides the accounting, auditing and tax agent functions for their SMSFs?

    SMSF auditors must comply with the independence requirements in APES 110 which provides guidance on how a large firm should take steps to mitigate threats to independence. For instance, no member of the audit team should work with the team that prepares the accounts for the SMSF.

    For some firms this can be a problem, particularly with employees acting as auditors, where the firm acts as accountant or tax agent and the employee is working for the partner who is the responsible accountant for the SMSF and appropriate independence safeguards cannot be implemented.

    Auditor independence is still an issue, what areas does the ATO still consider risky?

    Self-review threats where the auditor also prepares the fund accounts and self-interest threats where the auditor has a family relationship or financial interest in the fund continue to be a focus. We are also looking at SMSF auditors who are also the fund’s tax agent. Future considerations include reviewing audit firms that undertake multiple SMSF roles. We will be checking the appropriateness of their mitigation strategies in addressing potential independence issues.

    Audit obligations

    Can you explain what the audit obligations are for a fund that is made non-complying?

    When we make an SMSF non-complying, its obligations to have an annual audit remain the same. Fund members and trustees still have obligations in a non-complying fund.

    Super P2P

    Who can register for Super P2P and how is the service accessed?

    SMSF auditors can access this service using the form available on our website. We have extended the SP2P service over the last few years, and hope to progressively extend the service to all SMSF auditors over the next year.

    See also:

      Last modified: 21 Jul 2016QC 49078