ATO’s SMSF Auditor Independence questionnaire
Editor: The ATO has become increasingly concerned about the ability of self-managed superannuation fund (SMSF) auditors to comply with the independence requirements contained within Accounting Professional and Ethical Standards (APES) 110, where the registered tax agent is also the SMSF auditor of a fund.
It is therefore not surprising that the ATO has commenced sending out audit questionnaires to SMSF auditors who are also listed as the registered tax agent of the fund.
Tax agents are advised that they should ‘’take appropriate steps to safeguard their independence or remove themselves from the audit engagement’ where they are concerned about compliance with APES 110.’’
The following are excerpts from the ATO’s letter:
You need to review your auditor independence and complete a questionnaire
Approved SMSF auditors are required to comply with the independence requirements set out in APES 110- Code of Ethics for Professional Accountants.
Section 290 of the code restricts you from auditing an SMSF where:
- You are a member of that SMSF;
- You are a trustee of that SMSF;
- A partner within your own firm is a member/trustee of that SMSF;
- Your relative or a related party is a member/trustee of that SMSF;
- You have a business relationship with a member/trustee of the SMSF;
- You have also materially prepared the accounts for the SMSF; or
- Your staff have prepared the accounts.
Editor: the letter is accompanied by a questionnaire which we have posted on our website at Your Association.
The questionnaire covers issues such as:
Details of the services you provide to SMSF clients
- Describe the type and extent of tax agent services you provide to SMSF clients
- Do you provide any of the following services to your SMSF audit clients?
– Prepare accounts and statements
– Provide financial advice
– Provide Investment advice
– Other services
Information about how you address and mitigate any threats to independence
- How do you evaluate whether independence threats exist in an SMSF audit engagement?
- What steps do you take to mitigate threats to your independence as a SMSF auditor
- On reflection, after completing this questionnaire, are there any independence issues in current or previous fund audits that you wish to disclose?
Ref: ATO SMSF Segment- Audit questionnaires