The timing of my first blog couldn’t have been better. With the release of the Cooper report on Australia’s superannuation system last week, I have been canvassing members’ opinions on the recommendations. What did you think of the Cooper report?
Overall, I think there are some great ideas in there. MySuper and Superstream offer up some fantastic ideas for improving the super system for all Australians. The use of tax file numbers as an identifier to ensure people are correctly matched with their super savings – and stay that way – is a ‘no brainer’. Making super funds more comparable and transparent, and trustees more accountable, will go a long way to restoring confidence in our super system.
It’s a sad reality that MySuper was conceived because the majority of people – 80% – are disengaged with their super. But, in order to foster re-engagement, MySuper will need to be supported by other measures designed to educate Australians and grow their confidence in their retirement savings. Engagement should be a top priority for the government and hopefully that will be addressed in their response to the report.
My biggest concern with the Cooper report is that some of the recommendations – for example to increase regulation of SMSF auditors – reflect a misunderstanding of current systems and a failure to consider more practical measures that would achieve desired outcomes.
Other recommendations appear to have been made on assertions without supporting analysis, such as the proposal for ASIC to regulate auditor competency requirements.
The challenge for the government as it pursues a simpler, more efficient super system will be to weigh the benefits of increased regulation against the risk of strangling certain sectors of the industry.
I’m interested in your views. There will no doubt be much more discussion on these and other super issues as the government prepares its response to the Cooper review in this, an election year.
Wednesday, July 14, 2010
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Liz, I agree with your concerns about proposals to increase regulation of auditors, and in particular for ASIC to regulate auditor competency requirements. We should be continuing to point out that the professional accounting bodies already have a well-organised process for controlling the quality of their members' activities, that there are ongoing enhancements to professional standards in this area, and that to have a further overlay of regulation is wasteful, and shows unjustified lack of confidence in (even contempt for) the activities of our professional bodies.
ReplyDeleteI disagree. Any qualified accountant with a practising certificate, insurance and basic training can presently audit a super fund. And many do. The Cooper review found that more than half of SMSF auditors do fewer than five audits a year. This level does not justify an adequate investment in skills, knowledge and experience. A central regulatory regime would result in fewer, but more specialised and competent auditors.
ReplyDeleteWhy should any person bother doing the CA program, becoming a CA and getting a practicing certificate if you still can't practice as a tax agent, SMSF auditor, company auditor or financial planner without doing more study and training?
ReplyDeleteWhat was the point of the New Tax Agents Act if tax agents are so untrustworthy that they are unable to determine that a SMSF has complied with the SIS Act when preparing a tax return for a SMSF without having another perosn audit the SMSF?
Keep up the good work we are certainly going to make lots of money by restricting entry to this area of work.
I have grave concerns with the recommendations from The Cooper Review regarding independance and Self Managed Super Fund Audits. The integrity of the appointed Auditor to an SMSF must be of the highest standard, this is without question. I believe that the majority of Accountants, be they CA, CPA or NIA are professional and take their role as Auditors both responsibly and ethically. The minority who are not taking their role seriously should not be allowed to continue and I would expect the respective Accounting Bodies to bring the full force of their powers to restrict or reeducate these members. By forcing every Auditor of a SMSF to seek a further registration to qualify to audit funds is adding an unnecessary further layer of administration which will inevitably add costs to the audit process. The most effective way to deal with the minority of poor Auditors is to target these operators rather than the proposed broad brush to every SMSF Auditor.
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