Question mark

IPA queries government case on SMSF audit cycle

The Institute of Public Accountants has questioned whether the government’s proposed changes to the SMSF audit cycle will achieve any sort of compliance cost savings.

IPA chief executive Andrew Conway said the Institute was working with Treasury and with the Minister for Revenue and Financial Services Kelly O’Dwyer over the proposal.

He questioned whether reducing the audit cycle would enhance regulatory oversight and transparency in the SMSF sector.

“Without an annual SMSF auditor oversight, how will the regulator of the SMSF sector, monitor compliance?” Mr Conway said.

“These issues go far beyond the impact on SMSF auditors and speak to the very confidence and transparency of the SMSF sector.

“Arguments around compliance costs are myopic at best as trustees are likely to be required to have a three-year audit at greater total cost than the current 12-month) review. Will the unsubstantiated audit cost-saving be worth the significant risks such a measure introduces?”

Last week, Mr Conway said in a YouTube video that he’d received many concerns from members, adding that “it is important for the SMSF sector to be robust, strong and transparent”.

“One of the ways of achieving that is of course through the performance of an audit. We are presenting those concerns to the government and we are working very closely with them to make sure we firstly understand the policy rationale for this change,” he said.

7 thoughts on “IPA queries government case on SMSF audit cycle

  • May 22, 2018 at 6:03 pm
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    I cannot understand why we have heard nothing from th ASIC or the ATO on this proposal.
    Together they fought for and got Auditors of SMSF’s registered to get rid of “Chinese Walls” and Conflicts of Interest in Accounting Firms, and to lessen their oversight. This proposal means they will now have to allocate more of their “scarce” resources to overseeing SMSF’s again. Why aren’t they talking to these idiot politicians that come up with these half-baked ideas?

  • May 25, 2018 at 2:52 pm
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    3yr audit cycles won’t achieve anything
    With the complexities ever growing in the smsf sphere thee is always an on going need to have them audited over and above the 30 odd sections and regulations of the SIS
    Then there is audit standards accounting standards and ASIC ,s requirements

  • May 25, 2018 at 3:29 pm
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    So many issues have not been considered with this proposal.
    2/3 rd of SMSF Audit has the potential to be wiped of a practices books and in the light of the increase in SMSF Auditors fees to start, finish and / or change who in their right mind will become an SMSF auditor in the future
    ASIC says that SMSF Auditors are responsible for the opening balances and ensuring when taking on a new audit of the information for the prior year how will this work if an audit was undertaken 3 years ago.
    The SISA will need to be amended and the majority of trust deeds, if SMSF Auditors are going to be held to the ASIC’s current strict requirements then we will be forced to audit all years to protect ourselves please tell me where is the cost saving going to be and for whom.
    ATO brags that SMSF’s have less than a 2% contravention rate and the potential is that this will blow out in the future if the SMSF gatekeepers the Auditors do not undertake their duties annually.

  • May 25, 2018 at 4:54 pm
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    I am new to this area of accounting but already having done two or more complicated audits, where compliance was an issue, stretching the cycle will only cost more for trustees as there would need to be a longer process and the auditor would be required to go over three years worth of work to ensure all accounts balanced from previous audit.
    They are also adding more risk of fraud over this period particularly with more and more accounting programs becoming cloud based. It would be recommended the government reconsider.

  • May 25, 2018 at 6:23 pm
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    Given that funds will be administered by accountants and annual returns will be lodged on yearly basis, I don’t see a big problem with this proposal. Accountants will pick up any issues and advise clients to resolve them during those three years. Most accounting firms do both, administration and audit of funds, hence fees are not particularly lost. I am open minded although prefer yearly audits still.

  • May 25, 2018 at 7:36 pm
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    SMSF’s are an over-regulated sector because each fund represents a few individuals that do not have a cohesive voice. They continue to be faced with successive governments that wish they did not exist or wish they could get their hands on the funds to fix their bloated budgets. In addition, they have an accounting and legal professionals who see them as a good regular source of income. Yet amongst the Australian population, members of these funds have actively worked throughout their lifetime to provide for their own retirement and reduce the burden on government budgets. These people may want a better lifestyle in retirement than that provided by an aged pension, public service pension funds or public funds (which perform miserably). In doing so their expenditure in the economy keeps significant sectors (eg. tourism, etc) bubbling along employing many Australians without being a burden. From my point of view anything involved in reducing regulation of this sector is a welcome move.

  • May 28, 2018 at 1:31 pm
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    A disaster awaiting……good luck if they think this will work
    I have been auditing for long enough to know that it will encourage fraud and cost more in the long-term
    Do these people understand what they talking about ?

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