The Association of Superannuation Funds of Australia (ASFA) made the comments in a submission to the Australian Prudential Regulation Authority’s (APRA’s) September 20 consultation on draft Prudential Practice Guide SPG 310 Audit and Related Matters, which sets out the responsibilities of both the registrable superannuation entity (RSE) licensee and the RSE auditor with respect to the external audit of an RSE.
In particular, ASFA objected to the first paragraph of the consultation paper, which states: “It is the ultimate responsibility of the RSE licensee to ensure that the RSE auditor undertakes their role and responsibilities”.
In its submission, ASFA expressed its concern about the “breadth” of the statement.
“Apart from monitoring whether the contractual obligations of the audit engagement are satisfied, ASFA considers that RSE licensees are not in a position to be responsible for whether auditors undertake their roles properly,” said ASFA.
RSE licensees are not in a position to determine whether auditors have performed their audit work in accordance with the Auditing and Assurance Standards Board (AUASB), said the submission.
The Australian Institute of Superannuation Trustees (AIST) made similar objections, pointing out the APRA requirements “overwhelmingly fall on RSE licensees rather than on other providers”.
The terms of engagement for an audit are typically prepared by the RSE auditor, according to the AIST submission – and those terms should “identify all of the relevant provisions of the SIS Act that are subject to the audit, and assume responsibility for them”.
The RSE licensee should be able to “reasonably rely” on the formal confirmation by their auditor that the auditor has fulfilled its obligations, said AIST.
“It should not be the responsibility of the RSE licensee, therefore, if the RSE auditor fails to meet these obligations if it has provided this confirmation,” said the submission.
The ASFA submission also pointed to inconsistencies between SPG 310 and the AUASB auditing standards.
