Cooper Review recommendations that self-managed super funds (SMSFs) be subject to more stringent auditing requirements will needlessly increase costs, according to national accountancy firm Chan & Naylor.
“This proposal could significantly add to compliance costs, not to mention create greater administrative complexity for retirement savers,” said Chan & Naylor managing director Ken Raiss.
The review specifically suggested there be greater separation between auditors and accountants, but Raiss believes this would create a risk that an auditor would not necessarily obtain all the necessary data to perform the audit.
The system is already working well and the new measures would add as much as $2,000 to the running costs of an average $456,000 fund, he said.
There is already a requirement that the auditing and accounting aspects be undertaken by separate people but there is no drawback to having both tasks completed by the same firm, Raiss said.
“The current arrangements allow for the auditor and accountant to view the fund’s arrangements holistically and therefore objectively. There is a fine line between independence and good financial management, which we believe would be compromised under this proposal,” he said.
There is also the potential for the new requirements, if implemented, to reduce competition for auditing services, thus driving costs up further, he said.
