SPAA concern over SMSF audit changes
Proposed amendments to regulations on how long an auditor has to present a report to self-managed super fund (SMSF) trustees are unnecessarily complicated, according to the SMSF Professionals' Association of Australia (SPAA).
SPAA said it supports the initiative to amend the regulations and ensure auditors do not contravene the Superannuation Industry Supervision (SIS) Act regulations due to circumstances beyond their control, but had several major drawbacks.
Specifically, the proposals are unnecessarily complicated, only apply in certain circumstances, are very difficult to understand and impose unnecessarily strict timeframes on auditors who were appointed late, according to SPAA chairman Sharyn Long.
Currently, an auditor can theoretically face a gaol term if they don't provide an audit the day before the annual return is due, but under the new proposals an auditor has 30 days from the date of their appointments if that occurs within 31 days of the annual return due date.
The amendments also propose that when an auditor is "appointed late, requests information (but only documents, and only if the request is in writing) more than 21 days prior to the due date and the trustee does not provide this information within 7 days of the due date, then the auditor must complete the audit and provide the report within 7 days of the date of receipt of the information," SPAA stated.
SPAA said the proposed prescriptive time frames are unrealistic, commercially unviable, inconsistent with codes of professional and ethical conduct, and may discourage auditors from accepting certain audit engagements.
"The proposed amendments only apply to a request for 'documents', therefore excluding requests for clarification of transactions, dealing, or the fund's general activities, including compliance matters," Long said.
"It seems inequitable that a different extension and resulting penalty regime would exist between auditors who require documents to finalise the audit and those who are seeking clarification of certain matters in order to finalise the audit."
It would be impossible to complete most complex audits within 30 days of appointment, and it is unreasonable to expect auditors to complete audits and provide opinions within seven days of receipt of documents requested from the trustee, SPAA stated.
"SPAA believes that rather than limiting the time auditors have to complete audits, the regulations should provide auditors with the flexibility to properly complete the audit, and to provide the necessary audit report as soon as practically possible," Long said.
Recommended for you
The financial services technology firm has officially launched its digital advice and education solution for superannuation funds and other industry players.
The ETF provider has flagged a number of developments as it formally enters the superannuation space through a major acquisition.
While all MySuper products successfully passed the latest performance test, trustee-directed products encountered difficulties.
Iress has appointed Insignia Financial’s former general manager of master trust and insurance products as its newest CEO of superannuation, who will take over from Paul Giles.
