The proposed increases to ASIC’s fees for SMSF auditors are “seriously excessive”, says Chartered Accountants Australia and New Zealand (CAANZ).
Late in 2017 Treasury consulted on the introduction of a fee-for-service model for ASIC. Part of this includes substantial increases to the fees for SMSF auditors, increases which CAANZ calls “seriously excessive” in its submission.
The fees which are of “particular concern” to CAANZ are the application for registration as an SMSF auditor – a proposed increase from $107 to $3,429 – an application to cancel registration as an SMSF auditor – proposed increase from $0 to $899 – and the application to vary conditions imposed on SMSF auditor registration – proposed increase from $0 to $1,028.
“Establishing ongoing fees at this level of activity will significantly impact the ability of the profession to attract and develop appropriately qualified talent, making it difficult to continue to provide the essential assurance services the SMSF sector needs now and encourage growth and innovation in the future,” says CAANZ.
The accounting body says the magnitude of the SMSF auditors registration fee will discourage new SMSF auditors, making it difficult to adequately service the sector. The fees for cancelling an SMSF auditor registration are “inappropriate”, as they actively discourage auditors who find it inappropriate to continue registration from cancelling.
“We therefore recommend that the application of the industry funding model to the fees in the SMSF auditor subsector be reconsidered and the fees substantially reduced.”
“We consider that the Corporations (Fees) Regulations 2001 should continue to specify all ASIC fees regardless of whether they are determined on a cost-recovery basis. This way stakeholders have a single point of reference for all the fees. However the regulations should ensure that the ‘cost recovered’ and ‘non cost recovered fees’ are clearly distinguished.”
The Institute of Public Accountants (IPA) says the increase would have a “detrimental impact” on the number of SMSF auditors, and particularly impact small firms and sole practitioners.
“It would be an understatement to say that IPA members are bewildered and disappointed with this huge increase,” said the IPA, in its submission.
“Even though it won’t impact existing auditors, it may impact those who had planned to become auditors, especially since many won’t have an established client base.”
“For those who are specialized or highly specialized, including sole practitioners or small firms, it will mean absorbing the cost increase as some feel the cost cannot be passed on; while others expect to pass on the cost to clients. It remains to be seen if the additional cost can be passed on in an environment where many clients are seeking discounted prices and especially given the mounting costs on trustees.”