The Government's draft legislation around self-managed superannuation funds (SMSF) auditor registration may require significant adjustment if its original policy objectives are to be achieved, according to Institute of Chartered Accountants Australia (ICAA) superannuation specialist Liz Westover.
Discussing the issue with ICAA members, Westover said that she was also concerned that large parts of the new legislation had been written to give effect to regulations which had not yet been released by the Federal Treasury.
She said this made it hard to support the legislation because it was likely that the devil would be in the detail.
Westover cited the example of the introduction of mechanisms for payment of fees for searching the new register of approved SMSF auditors.
"This will be a costly hindrance to not only professional associations like the Institute but to trustees also wishing to access the register," she said. "Furthermore, the information that will be publicly available will not be sufficient for the professional associations to effectively manage our role in the new regime."
Westover warned that the new legislation also removed the ability and authority for regulators to refer members to their professional associations for potential disciplinary action where the regulator found an auditor wanting, yet gave no clear explanation as to why it was being removed.
"To date, the ATO has used this pathway as a means to facilitate further education and/or discipline of auditors, and the professional associations have had a positive relationship with the regulator to promote higher quality audits in the industry," she said. "I do not understand why this would be removed."
Westover said that in circumstances where the end goal for the new regime was to ensure competent auditors were carrying out quality audits in the SMSF industry, such an objective was only likely to be achieved with the cooperation and coordination of all stakeholders.
She said the new legislation needed to facilitate a co-regulatory approach to truly meet policy objectives, and it appeared to be falling short.
