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SMSF Auditors Professional Association Stakeholder Group key messages 2 December 2021

SMSF Auditors Professional Association Stakeholder Group key messages 2 December 2021.

Last updated 30 January 2022

Online services for business

We are on track for the decommissioning of the electronic superannuation audit tool (eSAT) in March 2022. An update was provided on Online services for business as follows:

Enhancements to Online services for business that we plan to deliver in the first half of next year include:

  • the ability to prepopulate auditor details into ACR and ACA forms
  • improved messaging to prompt you to download a copy of your ACR onto your device
  • increasing the number of draft ACR forms you can save and how long they can be saved for
  • increasing the free text field boxes to improve on screen text visibility.

Auditors can print draft ACRs to provide a record in Online services for business and can use the bulk ACA tool to report ACAs in bulk. A history of ACR lodgments will not be available. Auditors should not continue to draft ACRs in eSAT as they will be lost once eSAT is decommissioned.

The group was reminded that we have recently issued a Transition to Online services for business now news article and will undertake a targeted mailout to all auditors in the new year. Messaging is also provided in eSAT. Currently, whilst eSAT is still being used for ACR lodgment, we are seeing high usage of the bulk ACA tool in Online services for business.

Update to SMSF auditor checklist

The SMSF auditor checklist contains a detailed list of what we look for when auditing or reviewing an auditor and is published for the purposes of transparency. This includes checking that a SMSF auditor has complied with the independence requirements set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (2018).

We are in the process of updating the checklist with a separate table for the independence requirements, containing:

The updates to the checklist are intended to compliment the detailed web guidance we published on the independence requirements of the Code and will further assist SMSF auditors meet their obligations under the superannuation laws. The checklist is intended to be used as a quick reference by auditors and ATO compliance officers to help determine whether auditors have complied with the requirements. A modified version of the checklist is also used by Australian Securities and Investments Commission (ASIC).

Auditing and Assurance Standards Board update

The auditing and assurance standards board (AUASB) provided an update covering the following seven items:

  • ASA 315 Identifying and Assessing the Risks of Material MisstatementExternal Link has been revised to include scalability considerations for audits of less complex entities and will apply to income reporting periods commencing on or after 15 December 2021.
  • ASQM 1 Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements requires that systems of quality management in compliance with ASQM 1 are designed and implemented by 15 December 2022. The evaluation of the system of quality management required by ASQM 1 must also be performed within one year of 15 December 2022. Refer to AUASB website for guidanceExternal Link.
  • The post implementation review for ASAE 3100 Compliance Engagements is due to be undertaken in the first half of the 2022 calendar year
  • Guidance Statement GS 016 Bank Confirmation Requests is due to be revised in 2022
  • AUASB has issued a number of publications to assist auditors in the client’s use of technology on the audit and the application of technology tools as part of the audit process. Refer to AUASB website for detailsExternal Link.
  • AUASB’s Consultation Paper (PDF 2.57MB)This link will download a file covering the International Auditing and Assurance Standards Board’s proposed stand-alone standard for Audits of Financial Statements of Less Complex Entities is open for comment until 14 January 2022. So far, there is not much support for adoption of the proposed standard in Australia.
  • As part of its standard setting due process the AUASB is required to publicly consult on its strategy and work plan every five years. This Consultation process will commence in the first half of 2022.

Legislative Instrument – In-house assets determination

Due to the ongoing financial effects of COVID-19, trustees of SMSFs are still in a position where they, or a related party, are providing rental deferral relief to tenants.

The situation may give rise to an in-house asset contravention because:

  • a rental deferral provided by the fund to a related party tenant amounts to a loan to the related party, which would ordinarily be an in-house asset of the fund
  • if a fund has an investment in a related non-geared company or unit trust that is exempt from being an in-house asset under the super laws, and the related party provides a rental deferral to a tenant, this will cause the exemption to cease and the investment to become an in-house asset.

In recognition of the ongoing impact of COVID-19, we have extended the availability of the rental deferral relief we currently offer for the 2020- and 2021-income years, to cover the 2022 income year.

A draft Legislative Instrument (LI) extending the relief to cover the 2022 income year, and related Explanatory Statement is available for consultation until 17 December 2021 through Draft legislative instrument extending COVID-19 rental deferral relief now available for consultation. The final LI will be published early in the new year.

Stakeholders were reminded that rental deferral relief provided by a SMSF, or a related non-geared company or unit trust, to a tenant is required to be:

  • offered on arm’s length terms (having regard to State and Territory COVID-19 support measures, in particular NSW and Victoria), due to the financial impacts of COVID-19
  • documented appropriately.

Rent deferral relief should also be repaid by the tenant as soon as practicable.

ATO Compliance and Engagement Program update

The ATO’s Compliance and Engagement Program update included:

Top 100 auditors

For the 2022 income year, as of 16 November 2021 we have finalised seven Top 100 auditor cases. The results of the seven finalised audits are as follows:

Referral to ASIC


No further action required, fully compliant


Education outcome, due to minor deficiencies


Voluntary cancellations


The auditor referred to ASIC had not complied with the auditing standards with respect to:

  • obtaining sufficient audit evidence
  • evaluating the evidence
  • documenting the audit
  • engagement/trustee representation letters
  • audit plans.

The auditor also demonstrated a lack of knowledge of the legislation as a number of potential breaches were not identified.

High risk auditors

For the 2022 income year, as of 16 November 2021 we completed 15 high risk audits which resulted in:

Referral to ASIC


No further action required, fully compliant


Education outcome, due to minor deficiencies


Voluntary cancellations


Reasons for referral to ASIC included:

  • not meeting the independence requirements
  • not having sufficient evidence in their audit files to support their audit opinion
  • not documenting the audit adequately, including conclusions and judgements made
  • no or inadequate/outdated engagement and trustee representation letters.

SMSF auditor number (SAN) misuse

We completed 18 SAN misuse audits and reviews so far this income year, three of which have been referred to the Tax Practitioners Board (TPB) for further action.

Recently, the Administrative Appeals Tribunal (AAT) upheld a three month suspension of Vac Corporate Pty Ltd, imposed by the TPB for SAN misuse. The three month suspension was in addition to education orders and a written caution. The case was originally picked up through our 2017 SAN misuse mailout.

In September 2021, we finalised another SAN misuse mailout. To improve the detection of SAN misuse, we issued client lists to SMSF auditors containing funds they audited for the 2020 income year and funds they audited for other income years where the audit date had been reported during the period 1 July 2020 to 30 June 2021. Where we had received an auditor contravention report (ACR) and/or an audit complete advice (ACA) for the same income year, these funds were removed from the list. Accordingly, auditors lodging ACRs and ACAs during the period 1 July 2020 to 30 June 2021 would have received a smaller list to check than in other years, whilst those lodging multiple years of returns may have received a larger list.

As of 22 November 2021:

  • we had 2,000 auditors respond to our mailout, resulting in a 44% response rate
  • there were 153,317 funds who correctly reported the auditor in the SMSF annual return as having completed the audit.

To date, SAN misuse outcomes are lower than in previous years.

Making a tip-off

Auditors concerned about the competency of another tax professional, such as whether an approved SMSF auditor is meeting their obligation to conduct an independent and adequate audit, can complete the ATO Tip-Off Form. The form is also available in the contact us section of the ATO app or they can phone the ATO Tip-Off hotline on 1800 060 062.

Professional to Professional (P2P) service

Independence queries have spiked since 1 January 2021, particularly after we presented independence webinars and/or published and updated our independence guidance. Overall, since 1 January 2021, 49% of P2P queries received are independence related.

Most of the queries relate to the application of the independence requirements relevant to an auditor’s specific circumstances or business structure. Initially a lot of the queries were around conducting in-house audits, providing certain non-assurance services, and outsourcing. As we updated our guidance, the queries shifted to independence queries around referral sources, reciprocal auditing arrangements and audit pooling arrangements.

Australian Securities and Investments Commission update

The ASIC update included:

  • An overview of referrals received and outcomes for the calendar year. ASIC has recommenced casework that was previously impacted by COVID-19.
  • Other recent casework consists of ATO referrals of Top 100 and High-risk auditors, ATO referrals of auditors in Reciprocal auditing arrangements, where two auditors have agreed to audit each other’s funds and internal referrals of auditors.
  • ASIC has contacted around 1,500 SMSF auditors as part of a compliance campaign targeting outstanding annual statements. These auditors have been told to get their statements in by the end of the year. About a third of these have not signed up to ASIC’s regulatory portal. The communication provided guidance and other information needed to sign-up and lodge their statements. A follow-up will be conducted in the new year.

Other Business

Group members will be contacted to discuss any feedback in relation to the content and format of stakeholder meetings, the meeting schedule, and any suggestions for improvement.

In June 2020, stakeholder members (excluding ASIC and the AUASB), were issued a copy of our stakeholder relationship group member starter pack and statement of membership expectations. With membership growing at the time, to help us monitor group performance, we wanted members to understand the requirement to contribute and provide feedback. The starter pack also provided members with background information on stakeholder groups and the protocols to follow.

As tenure for our stakeholder group is for a period of two years, we are now due to undertake a review and a refresh of group membership prior to 1 July 2022. We currently have several candidates who have expressed an interest in joining our stakeholder group.

As part of the refresh, we will look to ensure that we have the right balance of members who:

  • appropriately represent the population of SMSF auditors
  • have demonstrated expert industry knowledge and actively contribute to the work of the group
  • have met the requirements in the statement of membership expectations.

Action item

SMSF Auditor Checklist

Due date

January 2022



Action item details

ATO to provide a marked-up copy of the checklist, if possible for comment.