As pressure on regulators to become bigger and better enforcers grows, the Australian Taxation Office (ATO) has said that it’s already referred 37 self-managed superannuation fund (SMSF) auditors to the Australian Securities and Investments Commission (ASIC) since last June, as part of their “co-regulator relationship”.
Since registration to the end of last financial year, 96 cases involving SMSF auditors were referred by the ATO to the corporate watchdog, with ATO Assistant Commissioner, SMSFs, Dana Fleming saying this figure was “steadily increasing” each year.
Of the 96 auditors, 20 per cent were disqualified, one per cent suspended for two years, 27 per cent had conditions imposed, and five per cent had their registrations cancelled by ASIC. The most common outcome was the voluntarily cancellation of registrations, occurring in 46 per cent of cases.
Speaking at the SMSF Association National Conference in Melbourne yesterday, Fleming said that the Office referred SMSF auditors to ASIC when it “found them to be deficient in their practices or not complying with their obligations”.
Specific reasons for referral to ASIC included:
- Failing to comply with auditor independence standards (accounting for 80 per cent of cases referred);
- Failing to comply with the Australian auditing and assurance standards (67 per cent);
- Not meeting registration conditions (26 per cent);
- Displaying a lack of knowledge of the Superannuation Industry (Supervision) Act and/or the Superannuation Industry (Supervision) Rules (21 per cent); and
- Not being a fit and proper person.