Working hand in hand
SMSF auditors say the most frustrating aspect of their work is when incomplete documentation is sent across, and they must wait for the missing material to turn up.
For their part, accounting practices say SMSF auditors can be extremely inflexible in their approach. Jong Chung, director of administration firm Superannuation IQ, says that audits work well when he and his staff deal with auditors throughout the year, especially with funds that have problems.
In short, the best approach is for both the SMSF administrator and the auditor to be proactive and want to help each other.
Chung says SMSF trustees really don’t value the SMSF audits and just want them done as cheaply as possible. The price of audits is highly variable, he notes, as is the approach most auditors take to this task. He knows of some auditors who appear to do little or no checking of the relevant information. On the other hand, he knows auditors who check absolutely everything. He thinks there needs to be a standard approach across the industry.
It is a sad reality that the Federal Government has had to regulate the SMSF sector. For at least 10 years, the Tax Office warned auditors that they needed to complete SMSF audits thoroughly and professionally. The accountancy bodies produced material and standards to help auditors understand their legislative obligations and to lift the quality of audits.
Many auditors took this advice on board and did try to improve. Unfortunately, a significant number of auditors ignored these warnings. Because of this refusal to self-regulate, the Government decided it had to solve the problem. Now accountants and auditors have to find ways to make that solution work.
[breakoutbox][breakoutbox_title]SMSF auditing: the next step[/breakoutbox_title][breakoutbox_content]
- From 1 July 2013, SMSF auditors must register with ASIC.
- Transitional measures must be in place if an accountant has audited at least 20 SMSFs over the past 12 months.
- Auditors must pass residency, education, experience, competency and “fit and proper person” tests or specific education requirements.
- Auditors must pass a competency exam.
- Approved auditors will receive ASIC SMSF Auditor Numbers.
[/breakoutbox_content][/breakoutbox]
