- Conducting SMSF audits
- SMSF auditor independence
- SMSF audit quality
- Regulatory framework
- Registration of approved SMSF auditors
- Competency requirements for SMSF auditors
- Obligations of approved SMSF auditors
- Related resources
Fact sheets and guides
APESB requirements and guidance
Articles, Webinars and Podcasts
Webinar | Independence Issues for SMSF Auditors | 9 July 2021
ATO Director Kellie Grant explains the ATO’s expectations of SMSF auditor independence arising from the restructured Code of Ethics
Podcast | SMSF auditors: Independence and code of ethics | 4th Sept 2020
In this podcast episode, Channa Wijesinghe and Kellie Grant discuss the restructured code of ethics as well as auditor independence matters that impact on the SMSF sector.
Charting a new course of Independence for SMSF accounting and audit firms
Accounting firms have until July 2021 to restructure their practice if they are providing accounting or compliance advisory services to SMSF audit clients
Auditor independence in the crosshair
The ATO is clamping down on SMSF auditors who fail to comply with their obligation to ensure audit independence.article·PublishedZilla EfratVisit INTHEBLACK
6 more threats to auditor independence
The ATO is increasing its focus on SMSF auditors who fail to meet key auditor independence requirements.article·PublishedMarks PhillipsVisit INTHEBLACK
Audit quality articles and resources
Approved ATO SMSF auditor checklist
What we look for when auditing the auditor
6 warning signs the ATO uses when monitoring SMSF auditors
The growth in self-managed superannuation funds (SMSFs) shows no signs of slowingarticle·PublishedJan McCallumVisit INTHEBLACK
Auditor responsible for SMSF’s losses, NSW Court of Appeal finds
A recent New South Wales case highlights and redefines the very high standard of care expected from auditors, accountants and other professionals when providing services.article·PublishedZilla EfratVisit INTHEBLACK
The risks of three-year SMSF audits
Plans to introduce a three-year audit cycle for compliant self-managed superannuation funds (SMSFs) will fail to reduce compliance costs for trustees and instead could force some auditors out of the market, accounting professionals warn.article·PublishedChristopher NiescheVisit INTHEBLACK
SMSF auditors verifying market values of unlisted shares or units in trusts
Approved self-managed super fund (SMSF) auditors are responsible for verifying the market values of unlisted shares in companies or units in trusts in an SMSF.
6 top issues in audit
Will new technologies create opportunities or just challenges for audit?article·PublishedVisit INTHEBLACK
SMSF auditors under renewed scrutiny
A legal precedent may be set for SMSF auditors after a court found a second auditor responsible for the lion’s share of an SMSF’s losses.article·PublishedClaire Grayston FCPAVisit INTHEBLACK
Your essential SMSF auditor checklist
Auditors of self-managed superannuation funds (SMSFs) have been in the regulatory spotlight since 2013, when registration became a requirement under the government’s Stronger Super reforms.article·PublishedClaire Grayston FCPAVisit INTHEBLACK
Three-year SMSF audits: how auditors will be affected
Experts says cutting audits of self-managed super funds (SMSFs) to once every three years instead of annually is unlikely to cut either costs or red tape and could have serious consequences for the SMSF audit sector.article·PublishedAlexandra CainVisit INTHEBLACK
4. Regulatory framework
An approved auditor must audit SMSFs annually under the Superannuation Industry (Supervision) Act 1993 (SISA).
An approved SMSF auditor must be registered with ASIC under section 128B of the SISA. ASIC has responsibility for registering approved SMSF auditors and setting competency standards.
The Australian Taxation Office (ATO) is responsible for monitoring the conduct of SMSF auditors. The ATO may refer an auditor to ASIC for non-compliance, which may impose any necessary administrative outcomes. Legal requirements about the structure of an SMSF are contained in the relevant SISA and Superannuation Industry (Supervision) Regulations 1994 (SISR). These are summarised in GS 009 Auditing Self-Managed Superannuation Funds, paragraphs 11 and 12.
In order to be eligible to audit a SMSF, you must be registered as an approved SMSF auditor with ASIC.
ASIC Regulatory Guide 243 Registration of self-managed superannuation fund auditors (RG 243) sets out the requirements for registration, how to apply for registration and the ongoing obligations for approved SMSF auditors.
Applications are submitted online using ASIC Connect and the registration requirements include:
- being an Australian resident
- passing a competency exam
- having the prescribed practical experience
- holding certain qualifications.
In addition, ASIC must be satisfied that you are unlikely to contravene your obligations, are capable of performing your duties, are a fit and proper person and are not subject to a disqualification or suspension order.
ASIC maintains a register of approved SMSF auditors and a register of banned and disqualified SMSF auditors, under the SIS Act.
Approved SMSF auditors must comply with the ASIC competency standards, which are contained in ASIC Class Order CO 12/1687 Competency standards for approved SMSF auditors. These competency standards are closely aligned with the Competency Requirements for Auditors of SMSFs issued by the joint accounting bodies, with the exception of the competency for documentation which is unique to ASIC’s competency standards.
The competency requirements for SMSF auditors are mandatory for members of these professional accounting bodies wishing to do this work.
Public practitioners who are auditing SMSFs must meet the following professional standards requirements:
- hold a practising certificate issued by the professional accounting body of which they are a member
- have continuing professional indemnity cover
- undertake continuing professional development, comprising at least 30 hours in each rolling three-year period, including 8 hours of superannuation training, 8 hours of financial or compliance audit training and 4 hours of financial accounting training, with the balance made up from any of these categories as necessary
- ensure that those who undertake work on their behalf have appropriate knowledge and experience, and are properly supervised in the conduct of the audit.
The SMSF auditor competency exam was developed by ASIC in consultation with industry. ASIC’s website provides details for booking your exam and what the exam covers, see SMSF auditors - competency exam.
The syllabus for the exam addresses the following learning objectives.
Resources useful in preparing for the exam:
- AUASB Guidance Statement GS 009 Auditing Self-Managed Superannuation Funds
- ASIC Regulatory Guide RG 243 Registration of self-managed superannuation fund auditors
- Superannuation Industry (Supervision) Act 1993 (SISA)
- Superannuation Industry (Supervision) Regulations 1994 (SISR)
- APES 110 Code of Ethics for Professional Accountants
- The Auditor Contravention Report and Auditor Contravention Report Instructions
The ongoing obligations of approved SMSF auditors include:
- complying with any registration conditions imposed
- undertaking continuing professional development
- complying with the ASIC Competency Standards and AUASB Standards, including Australian Auditing Standards and ASAE 3100 Compliance Engagements
- meeting the independence requirements in APES 110 Code of Ethics for Professional Accountants
- holding professional indemnity insurance
- lodging an annual statement with ASIC
- notifying ASIC of specific matters and activities.
8. Related resources on auditing
Small Entities Audit Manual
This publication is for those practitioners who audit small entities and is free for all CPA Australia members (Member login required)
Auditing small entities learning manual
With a strong practical focus, this manual compliments the Small Entities Audit Manual (SEAM). 12 hours of structured CPD.
Auditing of SMSFs
12 hours of structured CPD
Restructured code of ethics clarifies SMSF audit independence issues
Public practitioners with SMSF clients will need to review engagements where the firm conducts the accounting and audit. Here are some of the new requirements coming out of changes to the restructured codearticle
Auditor independence and rotation
Guides, resources and regulations for auditor rotation and independence
Licensed auditors: New Zealand
Practitioners who conduct audits in New Zealand must hold a licence
Auditing small and medium entities
Resources to help auditors understand the needs of smaller clients
Licensing requirements and regulations for auditors
Financial report audit resources
Resources, guidance and research on financial report audit practices