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Wednesday 19 August 2020

20-188MR ASIC acts against SMSF auditors who no longer have practical experience

ASIC has cancelled, or imposed conditions on, the registration of a number of auditors of self-managed superannuation funds (SMSFs) who had not maintained an appropriate level of audit experience.

Following a recent review, 36 SMSF auditor registrations have been cancelled and conditions have been imposed on a further six SMSF auditors.

All of the 42 SMSF auditors against whom ASIC acted had not issued any SMSF audit reports over the past five years and thus were not considered to have the necessary practical experience required to perform SMSF audits.

In relation to the six auditors who had conditions imposed on them, ASIC was satisfied that it would be an appropriate alternative to cancellation considering the auditor’s individual circumstances and other relevant (non-SMSF audit) experience. The various conditions imposed across these auditors were:

  • Independent reviews – Having a number of audits reviewed by an independent SMSF auditor for compliance with auditing standards;
  • Education – Completing specific courses of study, including in audit and fund compliance requirements under the Superannuation Industry (Supervision) Act 1993 (SIS Act) compliance; and
  • ASIC exam – Sitting and passing ASIC’s SMSF auditor competency exam prior to issuing any SMSF audit reports.

Background

From 1 July 2013, the SIS Act required all auditors of SMSFs to be registered with ASIC. This was to ensure that all SMSF auditors meet at least base standards of competency and expertise.

ASIC and the Australian Taxation Office (ATO) work closely together as co-regulators of SMSF auditors. The ATO monitors SMSF auditor conduct and may refer matters to ASIC for possible action in ASIC’s capacity as the review body that determines whether to disqualify an auditor or cancel or suspend their registration. ASIC may also impose conditions on an SMSF auditor.

Section 123E of the SIS Act allows the cancellation of the registration of an SMSF auditor who no longer has the practical experience required to perform SMSF audits.

Approved SMSF auditors seeking to cancel their registration voluntarily can do so through the ASIC Regulatory Portal.

Further information can be found on ASIC's website and in ASIC Regulatory Guide RG 243 Registration of self-managed superannuation fund auditors (RG 243).

SMSF trustees and members can check whether their auditor is registered, or whether a person has been disqualified, by searching ASIC's SMSF Auditor register.

Last updated: 19/08/2020 12:00