The Institute of CharteredAccountants (ICA) in Australia earlier this month distributed a CDROM to 5,000 of its members that audit self-managed super funds (SMSF).
The ICA has developed the CD in conjunction with the Australian Taxation Office (ATO) to help auditors comply with the requirements of the Superannuation Industry (Supervision) Act (SIS).
Financial planning and superannuation manager Hugh Elvy says the CD uses work programs that walk auditors through the required steps to audit financial statements and to meet the relevant legislative compliance requirements of SIS.
“Accountants that use the guide are less likely to be in breach of the professional standards and subsequently less likely to be audited by the ATO.”
The consequences of a breach of the auditing standards can lead to disqualification of the auditor by the ATO, Elvy emphasises.
“Failure of the auditor to identify and report breaches of SIS by the trustee can also increase the risk of a SMSF trustee losing out on tax benefits the SMSF structure can provide.”
The ATO is expected to audit up to 4,000 of the 30,000 SMSFs from the 2005-06 financial year, he says.
Elvy says “many ICA members perform only a few SMSF audits a year, and with multiple legislative requirements, it can be challenging to stay up-to-date with standards”.
“In addition, clients may not understand the difference between tax and SMSF audits and don’t see the need to hire one accountant for SMSF advice and another for the SMSF audit.”
The ICA recommends that member firms segregate the conduct of a SMSF audit from preparation of the financial statements and other administrative functions,” he says.
This can be done by “outsourcing the audit function or partnering with another firm in order to provide complementary but independent SMSF services”.
In addition to the launch of the CD, Elvy says, the ICA is holding comprehensive one-day seminars in each state during October.
These will enable SMSF auditors to be updated on the latest legislative and regulatory changes, and on issues involved in financial and audit reports, auditors obligations, compliance audits and recent ATO
activities.
— Liam Egan
