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