media release (22-042MR)

ASIC acts against SMSF auditors involved in reciprocal audit arrangements


To help protect the integrity of self-managed superannuation fund (SMSFs) audits, ASIC has accepted voluntary cancellations or imposed conditions on the registration of a number of SMSF auditors. These auditors were involved in reciprocal audit arrangements, which create self-interest and familiarity and threaten independence.

These actions follow referrals to ASIC by the Australian Taxation Office (ATO) of 18 SMSF auditors, for contravening the independence requirements under APES 110 Code of Ethics for Professional Accountants (APES 110) because of their involvement in reciprocal audit arrangements.

Each of the reciprocal audit arrangements involved two SMSF auditors who audited each other’s personal SMSFs. There are no safeguards that can reduce the threats to an acceptable level and the auditors should not have entered into the arrangements.

Consequently, ASIC accepted voluntary cancellation requests from nine of the SMSF auditors and imposed additional conditions on the registration of the other nine. The additional conditions imposed on the auditors included:

  • restrictions in relation to audits of their personal funds;
  • independence reviews to be performed and declarations to be made to ASIC about their SMSF audit clients;
  • additional education requirements relating to ethics and auditor independence;
  • a requirement to notify their professional association.

These actions were appropriate considering the auditors’ individual circumstances and the developments in guidance and practice since ending their reciprocal audit arrangements. It should now be clear to SMSF auditors that entering into reciprocal audit arrangements is an unacceptable breach of their independence requirements. ASIC will disqualify auditors for such breaches where appropriate.


Approved SMSF auditors are registered with ASIC under the Superannuation Industry (Supervision) Act 1993 (SIS Act).

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, which may decide to disqualify, suspend, cancel or impose addition conditions on registrations.

SMSF auditors must comply with the auditor independence requirements set by the Accounting and Professional Ethics Standards Board (APESB) in APES 110. Auditors are required to identify, evaluate and address threats to their independence.

Guidance on reciprocal SMSF audit arrangements is included in APESB – Independence Guide – 5th Edition, May 2020, which explains the relevant independence threats and the lack of available safeguards.

SMSF auditors have the right to appeal decisions ASIC makes in relation to them under the SIS Act. They may request that ASIC reconsider a decision it has made against them. If the decision is confirmed or varied the SMSF auditor may apply to the Administrative Appeals Tribunal for further review of the decision.

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

SMSF trustees and members can check whether their auditor is registered, suspended, has conditions imposed on their registration by searching ASIC's SMSF Auditor register.

Media enquiries: Contact ASIC Media Unit