This week in review - our Blog

The real benefits of SMSF audit independence

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In recent years - the SMSF environment has taken enormous strides forward. These include all aspects, such as administration, strategies, technology and YES the audit.

However I am still amazed by some practices who maintain the audit function (in-house) while providing concurrent services such as tax, accounting and financial advisory. I completely understand their “commercial” reasoning to maintain the audit function (in-house), but is this really wise and the best business decision?

I have been repeatedly asked - why should I send my SMSF clients to you for audit?

  • Outsourcing SMSF Audits allows you to concentrate on other aspects of your accounting firm. SMSF Audit becomes one aspect of work where you do not have to be skilled up, you do not have to resource it with trained staff.  
  • Some staff don’t like SMSF Audit, so are glad to see it outsourced.  Corporate audit teams are often averse to doing SMSF Audits.
  • SMSF Auditors develop effective efficient standard processes, generally computer driven, to achieve economies not available to a general accounting firm.  The standard work papers and checklists help ensure all aspects are considered.
  • An SMSF Auditor is able to concentrate on one area of practice and keep totally up to date with any changes in legislation, the results of cases, any announcements by the ATO, etc.  So one less set of professional reading for you.  Further, SMSF Auditors build connections with all the appropriate “go to” people on SMSF Audit.
  • Using an outsourced SMSF Auditor allows a separation of duties and better review of the clients’ SMSF.  If your accountants are very busy with accounting, business management and tax work for clients, it is possible the SMSF Audit work will be delayed.  It may not receive priority, until deadlines loom, then you may not have the resources to do it.
  • Another reason for using an outsourced SMSF Auditor is down to regulations such as APES 110, which indicate you cannot audit your own SMSF clients if you are a sole practitioner.  So you may have no choice but to outsource.
  • With the looming removal of the “Accountants Exemption” from 1 July 2016 and their need to become “licensed” to provide financial advice in the SMSF arena, there is a strong argument that anyone providing such financial advice, should not be involved with the SMSF audit role. It very hard to argue audit independence where these roles are mixed or even closely aligned within the same firm.

Above all…I believe we are most successful when we focus on areas that we love. This includes our professional life as well. If SMSF audits are not your passion, then let us help focus on what you’re good at.

Should you need more information, please call us on 1300 551 261

© David Saul – Saul SMSF

David was among the first professionals to be accredited through SPAA as an SMSF Specialist Advisor™. He is also a Chartered Accountant and holds a Bachelor of Financial Administration from the University of New England, Armidale NSW.