Trustees of self-managed superannuation funds (SMSF) in rural areas could be faced with increased costs and a limited number of audit options if the Cooper review’s recommendation on auditing independence is legislated.
Professional accounting bodies, such as the National Institute of Accountants (NIA) and CPA Australia, have raised their concerns regarding the difficulties this proposal could cause for SMSF trustees living in country areas.
“We are concerned for those in regional areas who are already finding it hard enough to get an accountant to do their work anyway. If they bring this [independence law] in, it’s going to make it very difficult for trustees to actually get proper audits done,” NIA member integrity manager Reece Agland said.
“They’ll have to go and engage another separate professional to do that and they might have to ship it off to one of the big firms in the city, because that’s the only way they can get an independent auditor. So that’s probably going to cost them more money than if they get the same firm to do it.
“The other issue for rural and regional areas that does concern us is if you’ve got one or two accountants servicing your area, then what are you supposed to do if one isn’t an expert in SMSFs? Are they going to have to drop all their other work so that the one who is an expert in that area does all of them?”
CPA Australia superannuation policy senior adviser Michael Davison agreed the impact of the auditing independence proposal was a major issue for rural areas.
“If you start doing that either you’re really going to restrict access or people are going to be forced to send their fund or their work out of town – figuratively, pack your SMSF into a box and ship it off to Sydney or somewhere,” Davison said.
“We just don’t think it’s reasonable. Whilst you have to have separation of functions and not provide advice or influence over clients, trustees do benefit from having that relationship with their auditor and they can guide them to a certain degree, and if you don’t have that relationship the trustee is potentially going to be worse off.”
However, Self-Managed Superannuation Fund Professionals’ Association of Australia (SPAA) chief executive Andrea Slattery said e-commerce now meant there was a better opportunity for these sorts of situations to be overcome.
“It’s a genuine issue but we also feel that because of electronic business there is the capacity to actually have that independence,” Slattery said.
“We believe that it’s important that those people in a country town are serviced, and while it is a problem and it’s something that we must be very conscious of, it’s an issue that can be addressed.
“I think it can actually strengthen relationships with people in rural areas so that people do have an ability to develop networks in the country and so they don’t have to go to the city to get these things done.”
