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The Corporate Regulator has taken action against 15 auditors following a review into audit firms conducting both accounting and auditing work for SMSF clients.
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ASIC acts against 15 auditors over in-house audit concerns
14 March 2024
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ASIC had imposed conditions on the registration of 13 SMSF auditors and accepted voluntary cancellations of two SMSF auditors after independence concerns were identified.
The 15 SMSF auditors were referred to ASIC by the ATO following a review of audit firms that undertook both accounting and auditing work for SMSF clients.
ASIC said it had concerns that financial statements for SMSF clients were prepared by the same firm that also conducted the SMSF audit, in breach of the SMSF auditor’s independence requirements.
“The conditions emphasise the restriction on performing in-house audits, require an independence review of all SMSF audit clients and notification of the conditions to their professional association,” ASIC said.
“One SMSF auditor has applied to the Administrative Appeals Tribunal for review of ASIC’s decision to impose conditions.”
ASIC deputy chair Sarah Court said independence is fundamental to auditors in protecting the integrity of the SMSF industry.
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“SMSF auditors should carefully consider their structure and any services provided to audit clients to identify and evaluate independence. ASIC will take action where appropriate to reinforce the independence requirements.”
Changes made to the the SMSF independence standards set out in APES 110 Code of Ethics for Professional Accountants in early 2020 meant that SMSFs auditors have been restricted from performing in-house SMSF clients since 1 July 2021.
These latest actions taken by ASIC follow the compliance action it undertook against nine auditors in the December quarter last year for conduct that did not meet the required standards.
This included concerns about compliance with auditing and assurance standards, independence requirements, registration conditions, or for not being a fit and proper person to remain an SMSF auditor.
The Corporate Regulator also announced actions against 11 SMSF auditors in the September quarter due to similar concerns.
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