Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Super funds under investigation after auditor red flags

Magnifying glass under investigation

About 100 self-managed superannuation funds (SMSFs) will be investigated this financial year, after concerning patterns were detected in their use of approved auditors.

An SMSF is required to undertake an annual audit, from an approved SMSF auditor. However, the ATO has found that some funds have falsely claimed an audit has been completed, after its data matching indicated auditor numbers were being used by SMSF trustees without the auditor's approval. 

“SMSF trustees or the responsible tax agent may face penalties or prosecution for deliberately making false or misleading statements to the commissioner when reporting an incorrect auditor number or lodging an SMSF annual return before an audit is complete,” the ATO warned in an online update this week. 

“This financial year we plan to investigate more than 100 SMSFs for reports of an auditor number used on the SMSF annual return without the auditor's authority.”

Trustees can avoid errors and potential penalties by checking the auditor number on the SMSF annual return matches the number of the auditor auditing the fund and only lodging the annual return after the audit is completed.

The misuse of SMSF auditor numbers has been an ongoing focus area for the ATO, with the ATO reporting a number of cases in 2015 of tax agents who had charged their SMSF clients for an audit when an audit had never occurred.

Changes in the works

There is currently a proposal in the works to move the SMSF audit cycle from once a year to once every three years. 

It's questionable at this point whether that will be a good move for investors, particularly given the increased risk of costly compliance issues going unnoticed. 

You can read more about what's on the horizon with SMSF audits here. 

Super funds under investigation after auditor red flags
Magnifying glass under investigation
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
just wondering - Fintech advisers mostly appear to invest in a bundle of ETF's. You don't mention about the additional potentials risks of ETF investments over direct.......
Mort Schwartzbord - It was always apparent from the initial announcement by Labor that the abolition of negative gearing claims would apply to all investments. This will.......
Maureen - Perhaps the change is a reflection of age. Y0unger people are not as charitable as previous generations. The older people who used to give are now.......
Ian S Falconer - The Grattan Institute have again demonstrated that they are totally out of touch with the real world.
There are 'ooo's of self employed people who.......