- 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
Joint Accounting Bodies release service organisation guidance for SMSF auditors
CPA Australia, Chartered Accountants Australia and New Zealand and the Institute of Public Accountants (“the Joint Accounting Bodies”) have jointly issued guidance for self-managed superannuation fund (SMSF) auditors on SMSFs using investment management service organisations. In the form of frequently asked questions (FAQs), the guidance aims to provide some simple, concise signposting by bringing together relevant paragraphs of the applicable auditing and assurance standards, and guidance statements.
It is in response to questions that members have asked the Joint Accounting Bodies in relation to auditing SMSF financial reports where the SMSF outsources the management of its investments to a service organisation. The guide emphasises that it is possible to obtain sufficient appropriate audit evidence, but there is no one-size-fits-all approach, and the outcome is not binary. As with all audits, the nature, timing and extent of audit procedures are based on risk and the auditor’s professional judgement.
Fact sheets and guides
APESB requirements and guidance
Articles, Webinars and Podcasts
Webinar | Independence Issues for SMSF Auditors | 9 July 2021
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
Auditor independence in the crosshairarticle·Published onZilla EfratVisit INTHEBLACK
6 more threats to auditor independencearticle·Published onMarks PhillipsVisit INTHEBLACK
Audit quality articles and resources
Approved ATO SMSF auditor checklist
6 warning signs the ATO uses when monitoring SMSF auditors
article·Published onJan McCallumVisit INTHEBLACK
Auditor responsible for SMSF’s losses, NSW Court of Appeal finds
article·Published onZilla EfratVisit INTHEBLACK
The risks of three-year SMSF audits
article·Published onChristopher NiescheVisit INTHEBLACK
SMSF auditors verifying market values of unlisted shares or units in trusts
6 top issues in auditarticle·Published onVisit INTHEBLACK
SMSF auditors under renewed scrutinyarticle·Published onClaire Grayston FCPAVisit INTHEBLACK
Your essential SMSF auditor checklistarticle·Published onClaire Grayston FCPAVisit INTHEBLACK
Three-year SMSF audits: how auditors will be affectedarticle·Published onAlexandra 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.
Joint Accounting Bodies withdraw SMSF auditor competency requirements
Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia and the Institute of Public Accountants (IPA) (“the Joint Accounting Bodies”) have withdrawn Competency Requirements for Auditors of Self-Managed Superannuation Funds. This is to simplify the SMSF auditor competency framework and eliminate duplication that has emerged, it does not change the competency requirements of SMSF auditors.
Originally issued in February 2008, it set out the minimum competency requirements for members of the three accounting bodies who sign audit reports for SMSFs. It formed the basis of ASIC Class Order CO 12/1687 Competency Standards for Approved Self-Managed Superannuation Fund (SMSF) Auditors in December 2012. ASIC has now repealed the Class Order because, overtime, it has gradually been superseded by:
- Requirements in the:
- Superannuation Industry (Supervision) Act 1993 and the Superannuation Industry (Supervision) Regulations 1994
- Auditing and assurance standards issued by the Auditing and Assurance Standards Board (AUASB)
- Professional, ethical and independence requirements in APES 110 Code of Ethics for Professional Accountants (including Independence Standards) issued by the Accounting Professional and Ethical Standards Board (APESB).
- The ASIC registration process for becoming an Approved SMSF Auditor, including the SMSF auditor competency exam.
- The ASIC and Australian Taxation Office (ATO) regulatory oversight functions.
Importantly, the knowledge required by candidates to succeed in the SMSF auditor competency exam is set out in the learning objectives on the ASIC website.
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.
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
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