SMSF auditors left exposed while waiting for banks

The vagaries of dealing with banking institutions, along with a range of other factors, were likely to mean the 28 days provided to self-managed superannuation fund (SMSF) auditors to complete audit reports may not be long enough, according to the Association of Superannuation Funds of Australia (ASFA).

In a submission to the Treasury filed this week, ASFA has broadly supported the registration of SMSF auditors but has taken issue with some of the audit time-frames suggested in the proposed new regulations.

In doing so it pointed to the proposed regulation giving an auditor 28 days after the trustee of the fund has provided all documents and said, "getting the papers from trustees and getting related papers from financial institutions are two different things".

The submission said the 28 days might still be an insufficient time period, particularly if the auditor has determined that external confirmations were appropriate to the audit.

"While the auditor will not be waiting on the trustees; they may be waiting on, say, a bank or other investment institute to confirm assets held by the fund. The response time of these institutions is clearly outside the auditor's control," it said.

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The ASFA submission also pointed to the Superannuation Industry (Supervision) Act under which, in theory, an auditor could still be prosecuted (and go to jail) for failing to meet such a time-frame.

"Even though the 28-day period is likely to work in most instances, there needs to be a mechanism to 'stop the clock' when the auditor is waiting on advice or information within that period," it said.