ASIC issues final warning on SMSF Auditor annual statements

ASIC approved SMSF Auditor, ASIC, SMSF Auditor annual statements, registration feesASIC has issued a “final warning” to 185 approved SMSF auditors who have yet to lodge their outstanding annual statements.

ASIC says that their registrations as SMSF auditors will be cancelled if the annual statements are not lodged and registration fees paid by the 22nd of July 2016.

“As part of its compliance program, ASIC contacted SMSF auditors who had not lodged their annual statements. ASIC sent emails and letters and telephoned the auditors using the current contact details provided by them. While most of the auditors responded by lodging their outstanding annual statements and paying their lodgement fees, 185 auditors are still yet to comply,” said a statement by ASIC. Read more...

ASIC cancels registration of 440 SMSF auditors

ASIC cancels SMSF auditor registrations ASIC has announced that the registrations of 440 SMSF auditors have been cancelled, as they “did not undertake or pass a competency exam necessary to retain their registration.”

“Of the 440 auditors whose registration was cancelled, 373 did not attempt the exam and 67 did not pass the exam,” said ASIC.

Two SMSF auditors were also disqualified for overstating the number of SMSF audits they had performed in the 12 months prior to their application. People who had audited at least 20 SMSFs in the year prior to their application did not need to sit the competency exam.

SMSF Auditor registration with ASIC

SMSF Auditor RegistrationSince 1 July 2013 in order to audit SMSFs auditors have been required to be registered with ASIC.

Registering as an SMSF auditor

Registration as an SMSF auditor has a number of conditions, including residency, education and practical experience.

Auditors could apply to ASIC for registration from 31 January 2013, and there was a transition period in place, though this has now ended.

ATO points to emerging risks for SMSFs

Australian Taxation Office - ATO SMSF emerging risksThe ATO Assistant Commissioner with responsibility for SMSFs, Matt Bambrick, has highlighted emerging risks that concern the ATO in the SMSF sector.

The speech, Update from the ATO on recent compliance activity, areas of concern with SMSFs and the ATOs future priorities, was given to the CPA Learn from the Masters SMSF Conference and Expo 2014.

SMSF Overseas Seminars

The ATO is concerned about promotors advertising “questionable SMSF conferences in overseas destinations”. It appears these seminars may be of limited value to the SMSF as they include “minimal training related to SMSF activities”. However the promotors claim the that the full costs of the trip can be claimed as a tax deduction. The ATO warns that:

“Trustees contemplating attending such events should be aware of the potential to contravene the sole purpose test.”

Only 62 applications for accountants limited AFSL says ASIC

ASIC accountant limited AFSLs, SMSF auditor, compliance actionASIC has received only 62 applications from accountants for limited AFSLs up to the end of May, 7,500 people have been registered as SMSF auditors and ASIC is concerned by advertising of SMSFs and property promotion.

These are some of the things to take from the speech, The Regulator’s Perspective on the Regulation of SMSFs, that the Commissioner of ASIC, Greg Tanzer, recently gave to the CPA Australia SMSF Conference 2014. Addressing the accounting body Tanzer said:

“We think that accountants and other gatekeepers have a critically important role to ensure that:

  • at an individual level, only those investors for whom an SMSF is suitable go into the SMSF sector and, in doing so, they are fully informed, and
  • at an aggregate level, the overall health of the SMSF sector is sound ”

Accountants Limited AFSL

Tanzer revealed a number of interesting statistics which show the lack of take-up of limited AFSLs by accountants, between 1 July 2013 and 27 May 2014:

  • ASIC has received only 62 applications for limited AFSLs
  • Only 27 limited AFSLs have been approved
  • One application is likely to be refused
  • 25 applications have been withdrawn or returned as they are “materially deficient in respect of the documentation and information which had been submitted in support of the application

New version of eSAT Electronic Super Audit Tool released

eSAT Electronic Superannuation Audit ToolThe ATO has released version 7.0.0 of the eSAT electronic superannuation audit tool. The June 2014 release has been updated to allow lodgement of Auditor/Actuary Contravention Reports for the 2014 lodgement year.

This release also includes a new question R8.02B – Valuation of Assets, with the note:

“When preparing accounts and statements required by subsection 35B(1) of SISA, an asset must be valued at its market value”

What is eSAT?

First introduced in 2008 eSAT is an alternative to the paper form for auditors to lodge a contravention report. eSAT offers the following features:

  • identify contraventions
  • prepare, save and lodge Auditor Contravention Reports electronically
  • revise Auditor Contravention Reports
  • record notes and audit history
  • access reference material
  • review audit outcome

Changes in the 2014 SMSF Annual Return

SMSF & Superannuation 2013 2014 financial yearThe ATO has published the 2014 versions of the SMSF Annual Return and instructions, which include the following changes from the 2013 returns:

First required SMSF Annual Return?

Consistent with the  ATOs announcement that “this year, we are focussing on newly registered SMSFs, encouraging on-time lodgment of their first return” the following has been added to the front page of the SMSF Annual Return 2014:

B: “Is this the first required return for a newly registered SMSF”

ATOs SMSF compliance focus

SMSF & Superannuation NewsIn the recently published speech to the SPAA national conference Alison Lendon, Acting Second ATO Commissioner, explained the ATOs SMSF compliance focus.

While acknowledging one of the roles of the ATO is to “ensure the health and security of this sector”, which Lendon thought was “in good shape”, the ATO does sometimes need to take “firmer actions”, such as those taken in 2012/13:

  • 150 SMSFs were made non-complying
  • 440 people were disqualified from being an SMSF trustee
  • 513 enforceable undertakings were entered
  • 70 funds were wound-up following audits
  • 438 funds were removed from the Super Fund Lookup database pending investigation for illegal early release schemes

However the ATO “usually prefer[s] to work with trustees and their advisers to rectify contraventions wherever appropriate”.