Maintenance of principles-based SMSF audit independence a win

Date issued: 21 September 2011

CPA Australia has welcomed the maintenance of a principles-based approach to independence standards for auditors of self-managed superannuation funds (SMSFs) as part of the Australian Government’s Stronger Super reforms announced today.

CPA Australia Senior Policy Adviser – Superannuation, Michael Davison, said the decision to maintain a principles-based approach to independence standards for SMSF auditors was a win for common sense.

'With reform, sometimes what’s maintained can be just as critical as any new initiatives and CPA Australia therefore welcomes the Government's decision not to proceed with setting prescriptive independence standards in recognition that the principles-based approach remains the most effective,' he said.

'CPA Australia has strongly advocated that the professional independence principles contained in APES 110 are set at an appropriate level and apply to all audit engagements. It would have been counterproductive to set additional requirements for SMSF audits and flown in the face of efforts toward greater transparency and efficiency.'

'We intend to work closely with the Accounting and Professional Ethical Standards (APES) Board to develop guidance on how the principles of this standard apply to the audit of SMSFs. Today’s announcement is a sensible outcome and will ensure the highest professional standards are maintained.'

'SMSFs are a significant and growing segment of Australia's superannuation system and importantly provide many Australians with the flexibility and control to save adequately for their retirement. SMSF auditors play a vital role in ensuring SMSFs comply with the superannuation laws. As auditors, members of the professional accounting bodies must abide by a number of professional and ethical standards when auditing SMSFs.'

CPA Australia also supports the registration of SMSF auditors and believes it will be beneficial to the profession and the SMSF segment. We will continue to work closely with the government to ensure a process is put in place that ensures the qualifications and professionalism of our members are appropriately recognised in the registration process.

Mr Davison said superannuation was also critical to issues around broader savings and economic reform.

'Apart from its obvious implications for retirement savings, superannuation is a key source of capital for much-needed infrastructure projects that will influence productivity improvements across the broader economy. It is important therefore that we get the system right,' he said.