ASIC crackdown on SMSF audit continues

ASIC has acted against eight SMSF auditors for breaches of their obligations, bringing the total for the past year to 26.

This includes breaches of auditing and assurance standards, independence requirements, registration conditions, or because ASIC is satisfied they are not a fit or proper person.

Between 1 April 2023 and 30 June 2023, five SMSF auditors were disqualified and three saw additional conditions imposed on them.

Paul Barry, Stephen Funder, Bruce Jones, Gregory Leggett and Malcolm Orman were disqualified from being SMSF auditors and are ineligible to reapply for registration. Funder has applied to the Administrative Appeals Tribunal for the decision to be reviewed.

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Toby Dodd, Mark Gregson and Clayton Lawrence had additional conditions imposed on their SMSF auditor registration. Conditions are specific to the auditor, and can require undertaking additional professional development, having independent reviews of SMSF audit files and audit tools, templates and methodology, and notifying their professional accounting association of the additional conditions.

ASIC commissioner, Danielle Press, said: “In the last year, ASIC has acted against 26 SMSF auditors who failed to meet the independence and auditing standards, or whose conduct called into question the integrity of SMSF audits. 

“The SMSF sector holds more than $865 billion in assets in over 600,000 funds and it is crucial that SMSF auditors comply with their regulatory obligations. ASIC will continue to take action where the conduct of SMSF auditors is inadequate.”

ASIC works together with the Australian Taxation Office to co-regulate the SMSF space.

In June, the registrations of 29 SMSF auditors were cancelled by ASIC for failing to lodge annual statements. This was in addition to the cancellation of 374 SMSF auditors in January 2023 as part of the regulator’s compliance program.

The regulator communicated to more than 1,400 SMSF auditors that they had outstanding annual statements, most of whom subsequently lodged their statements.

Failure to do so may have been due to poor administrative practices such as failing to keep their contact details up to date on the SMSF Auditor register, ASIC said.

Since 1 July 2013, the Superannuation Industry (Supervision) Act 1993 (SIS Act) requires all auditors of SMSFs to be registered with ASIC. This is to ensure that all SMSF auditors meet at least base standards of competency and expertise.