From 1 July, SMSFs must be audited by an ASIC-registered auditor. ASIC approved 135 applications in approximately three weeks, according to DFK business journalist Gunilla Haglundh. By her calculations, there will be close to 1000 registered and approved by the deadline; a far cry from the 9000 auditors that have been responsible for SMSFs in the past.
The Institute of Chartered Accountants has complained that the approval process is too slow, leaving the possibility that there will not be enough auditors to audit the fast-growing SMSF sector, says Haglundh.
Darren Kingdon, managing director of Kingdon financial group says this could be a concern if it led to an increase in late lodgements of annual returns for SMSF members. “That is, if there are fewer auditors around then this might lead to more late lodgements that would be subject to penalties under the post 1 July 2013 regime.” Penalties for late lodgements also include your SMSF clients losing their tax concessions. Kingdon says clients could also be at greater risk where planners are providing them with advice based on older, or unaudited, data.
One cause for the delay is in auditors providing ASIC with the right proof of education – a troublesome task for those who graduated before “audit” was listed in a degree transcript. Bradley Ross, auditor and partner of DFK Australia New Zealand, handed his application in when the registration opened on 31 January. According to Haglundh, he heard back a couple of weeks ago in regards to some questions, since then, nothing.
Ross says he has several colleagues who are worried about their registration because they studied such a long time ago. “I first had to plead with my University to get out my student number, it’s not something you remember 25 years later.”
Auditors need to lodge applications by 30 April at the latest to provide the regulator with adequate time for 1 July.
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