Auditor competencies and independence

The sentiment coming out of the Cooper review around SMSF auditors is right – it is important to ensure that all professionals working in this sector are appropriately skilled and abide by independence principles. Can more be done to support this objective? Absolutely. Should ASIC be brought in as the regulator and standard-setter? No way.

There is a robust system in place already covering the quality of SMSF audit activity for the majority of these service providers. More than 95% of SMSF auditors, as members of the three professional accounting bodies, are obliged to adhere to competency requirements, auditing standards and professional and ethical standards.

Members are also subject to quality review and disciplinary action where appropriate. Recommendations for these measures to apply to 100% of SMSF auditors would negate the need for ASIC to issue a new set of standards.

The professional accounting bodies have always shown a willingness to constructively work with the government and regulators, including improving the integrity of the audit function for SMSFs. The introduction of mandatory auditor competency requirements in July 2008 was a significant step and we continue to see the positive impacts these are having on the industry.

There were many practical measures presented to the Cooper review panel for further improvements to the audit function; direct reporting by auditors to the ATO, enhancement of existing ATO online software and a register of auditors being provided by the ATO.

It is unfortunate that these were largely ignored in favour of recommendations for sweeping changes to be determined by another regulator to this sector. The result will be more complexity and greater costs, which goes against the very objectives Jeremy Cooper was trying to achieve.