As part of our ongoing commitment to the improvement of professional standards, the Self-Managed Super Fund Professionals’ Association of Australia (SPAA) believes that self-managed super fund (SMSF) auditors should be encouraged to aspire to higher levels of achievement, post-graduate education and appropriate professional recognition.
Within the SMSF framework, we believe auditors play a critical role as gatekeepers of the compliance of the fund and meeting the administrative and operational requirements. Their role, historically, is to verify transactions within the fund using controls designed to protect superannuation assets and reduce any risk of mismanagement and misappropriation of retirement savings. In 2008, the Australian Taxation Office (ATO) conducted research on the SMSF auditors that were under its regulatory supervision at the time. The ATO acknowledged concerns that, of the approximate 13,000 approved auditors in Australia, between 80 and 90 per cent audit fewer than six funds per annum.
They also acknowledged the importance of dividing the audit role and function from the accounting role and function. Earlier this year, SPAA announced the SPAA SMSF Specialist Auditor (SSAud) Program. This program recognises the auditors who wish to attain excellence in their SMSF audit capacity. The SPAA program is set at an equivalent post-graduate level of study and challenges those who conduct SMSF
audits to become recognised as professionals. The eligibility criteria for entry into the SMSF Specialist Auditor Program is very strict and requires the auditor to meet both competency and independent criteria far more stringent than other association requirements.
SPAA has also recommended, through our submission to the Cooper Review, that SMSF auditors should be registered. Two key areas of concern for us are higher levels of competency and higher levels of independence – and we believe the new eligibility criteria will only work to enhance those perimeters. The major change recognises approved auditors who may perform fewer than 1000 hours as an SMSF auditor over a three-year period, due to the senior management and supervisory nature of their roles. Approved auditors who satisfy the alternate test by signing off on 75 or more SMSF audits in the past 12 months will be eligible to undertake the SSAud Program without justifying the hours that they spend completing SMSF audits.
To be eligible for the SPAA’s Specialist Auditor Program, a candidate must:
- Be a registered company auditor or a member of one of the following approved organisations – ICAA, CPA, NIA, a member/fellow of ATMA or a fellow of NTAA;
- Be a SPAA general member; Have attended a minimum of 40 hours of structured SMSF training in the past three years, of which at least eight hours is structured audit training;
- Have completed 1000 hours of practical SMSF audit experience in the past three years, of which at least 500 hours is in a senior or supervisory role; or have signed off as the “approved auditor” on 75 or more SMSF audits in the past 12 months;
- Supply two written character references;
- Agree to conduct SMSF audits in accordance with SPAA Standards of Professional Conduct for SMSF Specialist Auditors;
- Agree to conduct SMSF Audits in accordance with the Guidance Statement GS 009 Financial and Compliance Audits of Self-Managed Superannuation Funds, issued by the Auditing and Assurance
Standards Board; - Agree to satisfy SPAA’s Continuing Professional Development and Quality Review Program requirements;
- Hold current, valid and binding professional indemnity insurance covering the SMSF audit services.
We make no apologies for the tough and rigorous selection criteria, because we believe the independence and competency of the SMSF auditor is paramount. We also value highly the integrity, objectivity, professional behaviour and confidentiality of practitioners in this area. In order to continue to build integrity and faith in the SMSF sector and to protect the retirement savings of those who choose to manage their own superannuation, SPAA believes it is imperative the SMSF auditor – as the link between the trustee and the Tax Office – performs to best practice standards and beyond. The SMSF sector can only grow stronger, more trusted and more valued as a result.
