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Friday 18 September 2020

20-215MR ASIC moves against SMSF auditor misconduct

ASIC has added conditions to the registration of two auditors of self-managed superannuation funds (SMSFs).

ASIC additional conditions were imposed on the following SMSF auditors for the reasons outlined:

  • William Krammer, of Victoria, for auditor independence breaches and audit quality deficiencies, including not obtaining engagement letters, trustee representation letters, and sufficient appropriate audit evidence to support the ownership and market value of assets.

    The conditions imposed require Mr Krammer to complete additional training on SMSF audits and ethics, sit and pass the SMSF auditor competency exam, certify his independence to ASIC periodically, have three SMSF audits reviewed by an ASIC approved independent quality reviewer, and advise his professional body of the conditions.

  • Yuk Wong, of New South Wales, for auditor independence breaches and audit quality deficiencies including not obtaining engagement letters, trustee representation letters, and sufficient appropriate audit evidence in relation to trust deeds, investment strategies, asset ownership and valuations, borrowing arrangements, rental income and related parties.

    The conditions imposed require Mr Wong to complete additional training on SMSF auditing and ethics, sit and pass the SMSF auditor competency exam, provide evidence of his compliance with continuing professional development requirements, review and revise tools and templates used to perform and document SMSF audits, and advise his professional body of the conditions.

If an auditor breaches a condition on their registration, ASIC may disqualify or suspend their registration as an SMSF auditor.

Background

Information about the above auditors was referred to ASIC by the Australian Taxation Office (ATO) under section 128P of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

The SIS Act requires all auditors of SMSFs to be registered with ASIC. This ensures that all SMSF auditors meet the base standards of competency and expertise.

ASIC and the 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 such as disqualification or suspension of their registration. ASIC may also impose conditions on SMSF auditors.

SMSF trustees and members can check whether their auditor is registered and what conditions are on their registration by searching ASIC's SMSF auditor register. ASIC also maintains a public register of disqualified SMSF auditors. ASIC’s registers are available via connectonline.asic.gov.au.

Last updated: 18/09/2020 12:00