Complexity of SMSFs outpacing auditors
The complexity of the self-managed superannuation fund (SMSF) space is rapidly outpacing SMSF auditors, according to Chan and Naylor director of financial planning David Hasib.
"The problem for auditors - and I know them personally - is that it's a full-time job just keeping up with the strategies and the technical side to ensure they understand the fund they're auditing," Hasib said.
He welcomed the draft legislation relating to the auditing of SMSFs, under which auditors will be able to register with the Australian Securities and Investments Commission from 31 January 2013.
Registration will become mandatory from 1 July 2013, and approved auditors will be required to undertake at least 120 hours of continuing professional development every three years.
Auditors who have completed 20 audits in the 12 months prior to becoming registered will not be required to sit a competency test.
According to SMSF Professionals' Association of Australia (SPAA) technical director Peter Burgess, his organisation runs the only accredited program for SMSF auditors.
"We've recently launched a two-day SMSF audit course. That's to assist auditors going through our accreditation program, but it's also there to enable SMSF auditors to upskill and gain the competencies they need to undertake audits," Burgess said.
Burgess pointed out that the results of the Australian Taxation Office's (ATO's) compliance activity have shown that auditors who only undertake a small number of audits per year are more likely to encounter problems with the ATO.
"A lot depends on the quality of audits. Given that we've got 480,000 SMSFs out there you can't expect the ATO to be supervising the compliance of all those funds," Burgess said.
"[The ATO] relies heavily on the auditors doing the right thing and picking up breaches and reporting those breaches," he said.
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