The Government announced that it will implement registration for SMSF approved auditors from 1st July 2012. Professional associations may have a role to play in the auditor registration process.
Click here to download the SMSF Working Group Issues Paper
The Australian Securities and Investments Commission (ASIC) will be the registration body and will be responsible for determining the eligibility, competency and independence requirements for registration.
The Australian Taxation Office (ATO) will be responsible for policing the requirements and reporting any contraventions to ASIC for action.
A separate issues paper will be prepared on auditor independence and will be discussed at a later meeting. It is anticipated that the following will no longer be allowed
- Where the auditor and accounting is done by the same firm - sole Practice nor - self review threat
- Where the audit is done by one partner and accounting is done by another partner of the same firm - even if Chinese walls exit within the office - familiarity threat
- Where Firm A is only auditing all the SMSF of another Firm B and Firm B is only auditing all the SMSF clients of Firm A and no other audits are performed by each Firm - Intimidation threat
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A D V E R T I S E M E N T
SMSF Specialist Auditor available to audit your SMSF clients in your office in Sydney
For brochure click here For website click here
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Threats to independence in an SMSF audit engagement may include:
■ Self-interest threat - where you could benefit from a financial interest in, or other conflict with, an audit client. For example, this could arise if you, a member of your audit team or an immediate family member is a trustee or member of the SMSF or the SMSF principals are the sole or the significant client of the firm.
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■ Self-review threat - occurs when any product, such as a set of financial accounts, or a judgment of a previous engagement needs to be re-evaluated in reaching conclusions on the audit engagement, so that you are reviewing your own work - for example, where you as the auditor have also prepared the SMSF's financial report or accounting records or provided complex financial advice to the fund or fund members.
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■ Advocacy threat - occurs when your firm or a member of the audit team promotes, or may be perceived to promote, an audit client's position to the point that objectivity may be, or be perceived to be, compromised - for example, where an auditor acts as an advocate for the SMSF in litigation or a dispute.
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■ Familiarity threat - when, by virtue of a close relationship with the audit client, its directors, officers or employees, the firm or a member of the audit team becomes too sympathetic to the client's interest - for example, when a close family member is a trustee or member of the SMSF or an employee of the SMSF's administrator, or where you have a long association with a trustee.
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■ Intimidation threat - when you as the auditor are deterred from acting objectively by actual or perceived threats from the trustees of an SMSF, or the directors, employees, or officers of a related entity of a trustee - for example, where a threat of replacement is made over a disagreement about the application of an accounting principle.
Sent by :-
Manoj Abichandani SSA SSAud
SMSF Specialist Advisor
SMSF Specialist Auditor
Team Leader
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