ASIC acts against SMSF auditors

The Australian Securities and Investments Commission (ASIC) has announced it will act against self-managed superannuation funds (SMSF) auditors involved in reciprocal audit arrangements. 

The corporate regulator also accepted voluntary cancellations or imposed conditions on the registration of a number of SMSF auditors, in a move to help protect the integrity of SMSF audits in relation to arrangements that could “create self-interest and familiarity and threaten independence”. 

ASIC said that each of the reciprocal audit arrangements involved two SMSF auditors who audited each other’s personal SMSFs and there were no safeguards that could reduce the threats to an acceptable level and the auditors should not have entered into the arrangements. 

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Following this, ASIC accepted voluntary cancellation requests from nine of the SMSF auditors and imposed additional conditions on the registration of the other nine. The additional conditions imposed on the auditors included: 

restrictions in relation to audits of their personal funds; 

independence reviews to be performed and declarations to be made to ASIC about their SMSF audit clients; 

additional education requirements relating to ethics and auditor independence; and 

a requirement to notify their professional association. 

The regulator also said it worked closely with the Australian Taxation Office (ATO) as co-regulators of SMSF auditors. The ATO monitored SMSF auditor conduct and may refer matters to ASIC, which may decide to disqualify, suspend, cancel or impose addition conditions on registrations. 

SMSF auditors had the right to appeal decisions ASIC makes in relation to them under the SIS Act. 

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