Decline in SMSF Auditors to Exacerbate Post-Auditor Independence

According to an SMSF technical expert, the overall number of SMSF auditors has continued to fall, and the tendency may continue owing to the influence of independence standards and fee requirements.

It is reported that from end of June 2020 to end of June 2021, there was a 3.65 per cent decline in the total number of SMSF auditors. The 3 months follow (June 2021 – September 2021) witnessed further net loss that if we convert to an annual rate, it would equivalent to 6.19 per cent decrease, double the annual rate for 2020/2021.

Meanwhile, the SMSF technical expert claimed that the total number of SMSFs have been increasing at an annual rate of 3 per cent. That said, the SMSF auditors is facing a great increase in workload. On average, one auditor has to audit an average of 110 SMSFs currently, which was only 50 or less in 2018/2019.

It’s not hard to understand the drop in number of SMSF auditors. They have been facing greater responsibility, increased scrutiny from regulators, and higher liability risks more than ever. This trend is expected to continue and it is worrying many. Soon, the industry will suffer from capacity constraints with a limited number of specialists available to perform fund audits. Fees will further increase in accordance to this.

It is interesting to see more impacts of the new standard and what the future holds for the SMSF sector.  

If you need assistance with SMSF audit, then please drop ACSA a line.