The Commissioner of Taxation, Michael D’Ascenzo, recently described auditors as the ATO’s ‘eyes and ears’ for the self-managed super fund (SMSF) market, making an important contribution to the integrity of the system. I agree – SMSF auditors play a vital role in the success of this growing sector of the superannuation industry.
As the Stronger Super reforms are progressing, the measures for SMSF auditors around registration, competency and independence are being addressed. Because of their essential role, the government will want to maintain appropriate levels of competence for SMSF auditors.
The challenge for government and its advisers is to strike the right balance between determining the appropriate minimum requirements for auditors to operate, and ensuring that we still retain and attract adequate numbers of auditors to the industry.
The SMSF working group that is reporting to government on the Stronger Super reforms in the SMSF sector is currently discussing this very challenge, debating how much education and experience is necessary to qualify as an SMSF auditor.
While the bar cannot be set so low that underqualified and inexperienced auditors are able to operate in the industry, it is not in our best interests for the bar to be set so high that no one is willing to go through the qualification process. This could result in an insufficient number of auditors to audit the 440,000 SMSFs that now exist.
So what is the right balance? Consider these:
- What is the appropriate level of education; degree, diploma, specific SMSF audit course (or all of the above)?
- How many hours of SMSF audit experience should a person have before they can register as an SMSF auditor (suggestions have ranged from 100 hours to 1,000 hours)?
- How many audits should a person be undertaking per year for them to be considered ‘experienced’ enough to register as an SMSF auditor?
What do you think? How much education and experience do you think an SMSF auditor should have?
What is the point of having an audit module in the CA program if it does not meet the requirements to become an auditor? (registered company auditor or SMSF auditor)
ReplyDeleteAs an SMSF administrator I see a wide range in the standard of SMSF audits. Trustees see little or no value in this compliance task.
ReplyDeleteI note in the SMSF Audit Issues paper that there will be an annual registration fee. A large fee (perhaps $5K per annum) would certainly give rise to many auditors having second thoughts as to whether thay will continue to undertake SMSF audits.
For me the key factor for a good audit is competancy (perhaps even more than independance).
While you could assume that x hours spent on SMSF audits or completing a certain number of funds would indicate competancy - you should not assume this.
For me the minimum qualifications should be
- the completion of an appropriate SMSF auditing course
- the course should include a formal examination process
- all SMSF auditors regardless of their current experience should sit the examination
- on going prodessional development
Switzer Super Report ensures that their SMSF Administration are 100% reliable in handling their clients funds.
ReplyDeleteGreat article and really useful ..thanks for sharing.
ReplyDeletechange smsf member
i just wonder is there really a need to conduct an audit on the Self Managed Super Funds .
ReplyDelete