The Australian Taxation Office's (ATO) compliance activities on self-managed superannuation funds (SMSFs) has found a significant percentage of cases where there has been a serious lack of auditor independence.
"What we have found from our compliance activities is that there's been a lot of cases where we've had to actually take some firm action," ATO commissioner Michael D'Ascenzo told delegates at the Self-managed Super Fund Professionals' Association of Australia (SPAA) conference yesterday.
"There have been cases where there has not been that independence, there has been a high percentage, some 50 per cent of cases where we had to go back and take some rectification," he said.
"So from that experience what we're finding is where that independence is not there, we're finding a high risk and more instances that have that common element."
While the ATO has found the expertise of approved auditors is on the rise, D'Ascenzo said more professionals were recognising that it is a specialist field to operate in.
"People are finding that this is a difficult area - the rights, responsibilities, duties, professional standards and competence of approved auditors are quite onerous. So what we're seeing in the marketplace has been a shift from approved auditors doing low volume cases to greater specialisation," he said.
"So there's a realisation that this field is an area of specialisation, there are requirements and responsibilities and it's not like anybody can just float in and float out."
In terms of compliance levels of SMSFs, D'Ascenzo said the ATO has noticed a general maturing of the system.
"What we've seen is that the level of confidence and experience has been growing. It's been growing partly because of the support of professional bodies like SPAA, structured programs, accreditation and the expectations of professional bodies to meet standards of probity and competence," he said.
"We still get about 2 per cent of funds that have got serious non-contravention reports referred to us. We expect to act on about 2000 annual contravention reports next year."
"We've been trying to pick up some of the problems and then trying to translate those in terms of our guidance and education materials."
