Under APES110 Auditor independence effective 1 July 2021, SMSF auditors performing an in-house audit will be expected to show unambiguous proof their firm had no management duties for an SMSF and can verify the fund trustees were accountable for its supervision and direction.
Kellie Grant, ATO SMSF auditor and portfolio director, said the ATO will be checking auditor compliance with independence requirements and seeking for proof to back up that compliance during a webinar in early September.
Firms which continue to offer in-house audits after 1 July 2021 will be asked to provide evidence supporting that the firm did not assume any management responsibilities for the SMSF, and evidence that the trustee had the relevant skills, experience and knowledge to take responsibility for the preparation of the financial statements
Grant cautioned auditors against relying only on a trustee’s signature on financial statements or a signed trustee representation to determine if the trustee has fulfilled their fund obligations. When an SMSF auditor claims he/she does not involve in the fund’s management, the ATO might contact the trustees directly to confirm what activities were done by the trustee.
During the same webinar, it was also stated that if an SMSF accounting firm provided auditing and assurance services to an SMSF, even low-level management responsibilities offered to a fund would be considered a violation of the separation of services and would be in violation of auditor independence standards.
If you need assistance with SMSF audit, then please drop ACSA a line.