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SMSF Auditors Professional Association Stakeholder Group key messages 24 July 2023

Key messages discussed at the SMSF Auditors Professional Association Stakeholder Group meeting 24 July 2023.

Last updated 6 September 2023


There have been some recent changes to the group’s membership.

We formally acknowledge Deanne Firth, Naomi Kewley, Richard Smith and Vimbai Mhlanga for their contribution and involvement as members of the SMSF Auditors Professional Association Stakeholder Group for a period of over 2 years.

Welcome to new member Chris Craggs.

Action item updates

Guidance on Regulation 4.09A

An out of session meeting was convened in February 2023 to discuss the draft web content which was presented to members at the December 2022 meeting. Valuable feedback was provided which allowed an updated draft to be progressed.

The updated draft has been provided with today's agenda for member information.

The ATO is working towards releasing an updated website later this year, with rewritten content for the SMSF trustees and professional in early 2024. Because of these changes, we are prioritising our content publishing process and there will be a temporary delay to publishing new content.

The updated content for this action item is expected to be available on early in 2024.

SuperStream and contravention reporting for SMSFs

Following member feedback from the December 2022 meeting we have:

  • monitored SuperStream reporting rates and how auditors are currently completing ACRs
  • reviewed our web content for the instructions we currently provide auditors
  • considered how we are responding to ACRs where SuperStream contraventions are reported
  • updated web content in May 2023 to help educate and guide trustees through the process to reduce possibility of contraventions occurring.

We found a reasonable rate of ACRs being lodged and auditors are providing SuperStream detail in the free text field in accordance with SuperStream SMSF rollovers and auditor reporting obligations web content which was updated in September 2022.

We have improved our approach to responding to SuperStream contraventions and are now sending tailored correspondence which identifies a SuperStream breach has been reported.

The ACR instructions will be updated to align with the auditor web content.

Draft charter

A draft SMSF Auditors Professional Association Stakeholder Group charter was circulated within the group in June 2023 with feedback received. The charter has been reviewed and updated to maintain currency of member expectations.

There will continue to be rotations of members to provide opportunity for auditors and have continuity for industry engagement.

The charter will be finalised for 2023–24 and will be reviewed annually.


The ATO’s Compliance and Engagement Program update for the period 1 July 2022 to 30 June 2023 included:

  • A total of 80 SMSF Auditor compliance cases and 23 SMSF Auditor Number (SAN) misuse cases were completed
  • Referral rates to Australian Securities and Investments Commission (ASIC) have continued to increase in comparison to recent years. Forty one referrals we made to ASIC during 2022–23 which is the highest rate of referral since 2018–19.
  • Targeted reviews of auditors involved with in-house audit activity have commenced. Initial observations have identified independence concerns for audit firms and sole practitioners who have not restructured their operations.
  • Compliance action to further address identified reciprocal audit arrangements are in progress.

SAN misuse mailout summary:

  • During October 2022, client lists were emailed to 3,797 SMSF Auditors for all fund lodgments with a reported Audit Completion Date between 1 July 2021 and 30 June 2022.
  • This was connected to a total of 434,401 funds with a total combined assets of over $613 billion.
  • A total of 68,173 Audit Complete Advice (ACA) or Auditor Contravention Reports (ACRs) had been received by the ATO for the funds and were excluded from the mailout.
  • We captured a total of 1,680 responses via email, electronic portal channels or paper. Email was the preferred channel for sending responses, with Online services for agents next.
  • The predominant reason for SAN misuse remains software errors as auditor details on returns are not being updated prior to lodgment.
  • There has been a significant downward trend in occurrences of SAN misuse with minimal instances of deliberate misuse being reported.
  • Tax agents who are identified as misreporting SANs continue to be referred to the Tax Practitioners Board.
  • There will be a shift in the approach to managing the SAN misuse risk for 2023–24 noting the significant improvements in compliance behaviour in recent years. The ATO will continue to make client lists available to auditors who would like to verify the use of their auditor number however a targeted mailout of client lists will not occur in 2023–24. We continue to encourage auditors to lodge ACAs as this is the best means of ensuring the ATO has a record of an audit being conducted by an auditor for a specific fund.


Recently issued SMSF news articles and guidance material included:

Future work program focus areas

Crypto for auditors – it was noted that the current review of content will impact when this can be published. Currently expected in 2024.

Implementation of SMSF auditor survey action plan – we are continuing to focus on the ongoing delivery of articles on topics requested by auditors as well as promoting the availability and content on ‘SMSF news’ to improve subscription rate and readership.


It was noted that 374 auditors had their registration cancelled, for failing to lodge their annual statements. An outcome of the project is that all SMSF auditors are now registered on the ASIC Regulatory Portal. Professional associations may wish to consider messages to their members about their ongoing obligations to make annual statements to ASIC.

The ASIC competency standards for SMSF auditors (Class Order 12/1687) has been revoked. However, ASIC may continue to use them as part of the framework for maintaining ASIC’s competency exam.

Auditing and Assurance Standards Broad (AUASB)

International Auditing and Assurance Standards Board (ISSAB) agenda:

  • ISA 570 – Going concern – has implications for the audit report, Exposure Draft (ED) currently out for comment by 24 August 2023.
  • ISA 240 – Fraud – has implications for the audit report, ED is likely to be issued in December 2023.
  • ISSA 5000 – Sustainability assurance – ED to be issued by the IAASB at the end of July 2023 with 120-day comment period to 1 December 2023.

The EDs generally have a 3-month consultation period for anyone that is interested in providing comment. The AUASB will also be undertaking outreach on all these topics with ISA 570 virtual and face-to-face roundtables occurring in late July and early August 2023.

Other work priorities including work issued in the last 6 months or currently in progress:

  • Standard for Audits of Less Complex Entities – to be approved in September 2023 by the IAASB. AUASB to discuss its adoption and application in Australia at its September 2023 meeting.
  • Scalability – in relation to Not for Profit (NFP) entities the AUASB has recently issued 2 bulletins, one focusing on NFP fundraising revenue in a digital age and the other on what NFP entities need to know about an audit and review.
  • Sustainability Standards on Assurance – the AUASB will issue the Australian ED by mid-August 2023 and will conduct outreach to capture feedback in October 2023.
  • Technology – the Digital Standards Portal has been updated to provide access to the suite of AUASB Guidance Statements.

SMSF Audits and Use of Service Organisations:

  • The AUASB is trying to understand the prevalence of service organisations and the impact on SMSF audits. ASA 402 Auditing Considerations Relating to an Entity Using a Service Organisation deals with the user auditor’s (SMSF auditor) responsibility to obtain sufficient appropriate audit evidence when a SMSF uses the services of one or more service organisations, whilst service auditors are required to meet the requirements of ASAE 3402 Assurance Reports on Controls at a Service Organisation.
  • The group confirmed that the prevalence of service organisations is high for SMSFs however the ASAE 3402 Type 1 or Type 2 audit reports on the controls at the service organisation in relation to custodial assets cannot always be obtained as audit evidence. ASA 402 and ASA 330 The Auditor's Responses to Assessed Risks requires the auditor to perform further audit procedures to obtain sufficient appropriate audit evidence. If the auditor determines applying their professional judgement that they cannot obtain sufficient appropriate audit evidence as required by ASA 402 or through the SMSF, then the auditor of the SMSF would need to consider any impact on the audit report. The approach taken by some auditors in these circumstances is to qualify both Parts A and B of their audit report.

Action item

SMSF Audits and Use of Service Organisations

Due date

December 2023



Action item details

AUASB to consider whether a review of Guidance Statement GS 007 Audit Implications of the use of Service Organisations for Investment Management Services is appropriate. AUASB to discuss with the AUASB Technical Group. ATO to consider drafting guidance for auditors`.


Technical discussion

Pink diamonds

At the December 2022 meeting, a technical issue regarding the treatment of pink diamonds was raised as an issue requiring ATO clarification.

The matter has progressed internally within the ATO, and we expect to finalise our position shortly.

Partial or insufficient insurance

An issue has been raised by members of an association for the need to clarify the reporting requirements where partial/insufficient insurance is held for collectables under regulation 13.18AA of the SISR.

Members highlighted the need for the ATO to consider the intent of the regulation and the relevance and practicalities of market valuations when considering insurance cover.

Market valuations

The ATO has identified a compliance trend in referrals to ASIC where auditors are failing to take an appropriate approach to market valuations.

It was noted that auditors are required to obtain sufficient appropriate evidence, either from the trustee or external sources, to form an opinion about whether the SMSF has complied with regulation 8.02B and to document that evidence as well as any judgments made in their audit file.

ATO analysis of lodgment data has also identified several funds where we have observed classes of assets where the funds have not reported (via the SAR) a change in the asset value for several years.

Feedback was sought on the types of scenarios (and potential drivers for such behaviour) that may be of relevance for the ATO to be aware of where classes of assets may not have had a change in valuation over a 3-year period.

Section 66 – Assets acquired from related parties

The ATO has identified a potential compliance issue where auditors are only considering a fund’s compliance with Section 66 for acquisitions made during the year which is subject to audit.

Action item

Further discussion on the identified technical matters (Pink diamonds, partial or insufficient Insurance and Section 66 – Assets acquired from related parties) will be arranged via an out of session meeting. Position papers will be provided in advance to assist members understand the issues and prepare for the discussion.

Due date

October 2023



Action item details

Proposed ATO positions to be drafted and provided to members for comment in advance of scheduled meeting.


Attendees list




Paul Delahunty (Co-chair), Superannuation and Employer Obligations


Anna Kiriakopoulos, Superannuation and Employer Obligations


Ian Colhoun, Superannuation and Employer Obligations


Kellie Grant, Superannuation and Employer Obligations

Argurion Accounting Group

Chris Cragg

ASF Audits

Shelley Banton

Auditing and Assurance Standards Board

Marina Michaelides

Australian Securities and Investments Commission

Craig Angove


Matina Moffitt


Shirley Schaefer

Chartered Accountants Australia and New Zealand

Tony Negline

CPA Australia

Tiffany Tan

Elite Super

Katrina Fletcher

Institute of Public Accountants

Irwin Bushnell

National Tax and Accountants' Association

David Burrows

Reliance Auditing Services

Naz Randeria

SMSF Association

Tracey Scotchbrook

Super Sphere

Belinda Aisbett

The Auditors Institute

Linda De Marco

The Tax Institute

Kym Bailey


Apologies list




Justin Micale (Co-chair), Superannuation and Employer Obligations

ARC Super

Ashley Course

Auditing and Assurance Standards Board

Matthew Zappulla


Jo Hurley

CPA Australia

Richard Webb

The Auditors Institute

Ron Phipps-Ellis