The Administrative Appeals Tribunal (AAT) has upheld ASIC's decision to disqualify Ms Janette Townshend from being an approved self-managed superannuation fund (SMSF) auditor for breaching independence requirements. 　

"Suspending or disqualifying Ms Townshend would send a clear message to the rest of the audit profession that independence is crucially important. The need for general deterrence makes that essential’, Deputy President McCabe said.

Read the AAT’s decision and reasons for the decision.

Ms Townshend, of Templestowe, Victoria, was originally disqualified from being an approved SMSF auditor in August 2022 for breaching auditor independence requirements (refer 22-328MR). Ms Townshend appealed the decision to the AAT on 15 November 2022.

On 23 November 2023, the AAT delivered its decision to affirm the disqualification, finding there is no doubt that Ms Townshend was in breach of auditor independence requirements when she audited her spouse’s SMSF for six income years.

The AAT’s reasons include that, “The integrity of the taxation system and the protection of consumers will be compromised if auditors of SMSFs cannot be trusted to perform their role with skill, independence, and integrity.”

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 at connectonline.asic.gov.au.

Background

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 can refer matters to ASIC. ASIC also monitors the SMSF auditor population for non-compliance and is empowered to disqualify, suspend, cancel or impose additional conditions on the registration of SMSF auditors.

ASIC may make an order disqualifying or suspending a person from being an approved SMSF auditor, under section 130F of the SIS Act, if the person has failed to carry out or perform adequately and properly the duties and functions of an auditor or is not a fit and proper person to be an approved SMSF auditor. A disqualified SMSF auditor is placed on ASIC’s public banned and disqualified register at connectonline.asic.gov.au and is not eligible to reapply for registration.

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 AAT for further review of the decision.

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