House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

Self-Managed Superannuation Fund Auditor Registration

Outline of chapter

2.1 Schedule 2 of the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 amends the Superannuation Industry (Supervision) Act 1993 (SIS Act) to introduce a new registration regime for auditors of self-managed superannuation funds (SMSFs).

2.2 This chapter explains:

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registration requirements a person must meet in order to register with Australian Securities and Investments Commission (ASIC) and become an approved SMSF auditor;

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ongoing obligations of approved SMSF auditors;

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registers of approved SMSF auditors and disqualified SMSF auditors;

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disclosure of information between the Australian Taxation Office (ATO) and ASIC;

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fees imposed under the registration regime;

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penalties and compliance treatments including disqualification and suspension of approved SMSF auditors;

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monitoring and investigation powers of the ATO and ASIC; and

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application of transitional provisions.

2.3 All references in this chapter are to the SIS Actunless otherwise stated.

Context of amendments

Operation of current provisions

2.4 SMSF trustees are required to appoint an approved auditor to audit the financial reports and the operations of the fund for each year or part of the year the fund is in existence. The auditor is required to assess the fund's overall compliance with the law and the fund's financial statements.

2.5 The annual audit provides assurance to the Government and the general public that SMSFs are complying with the superannuation laws. This is particularly important given the level of taxation concessions provided to complying superannuation funds.

2.6 Auditors play a crucial role in the regulation of the SMSF sector and consequently, it is necessary that SMSF auditors have a high standard of competency.

Rationale for major changes

2.7 The Super System Review (Review) found that while some approved auditors are subject to minimum competency standards through their professional association, not all approved auditors are subject to the same minimum competency standards, nor are they subject to the same enforcement actions.

2.8 In addition, the Review identified issues with SMSF auditor independence. The ATO's 2009 compliance activities targeting high risk approved auditors identified that 29 per cent of those auditors were the SMSF's accountant and had prepared a material part of its financial statements. Also, 28 per cent of those auditors exhibited evidence of a relationship or conflict of interest that might impact the auditor's ability to be independent.

2.9 The Review recommended that ASIC be appointed as the registration body for SMSF approved auditors and be responsible for determining eligibility requirements, setting competency standards and determining and taking appropriate enforcement action. The Review also recommended that the ATO police the approved auditor standards.

2.10 The Review also recommended the introduction of independence requirements for SMSF auditors to ensure that SMSF audits can be relied upon to provide an objective assessment of compliance with the superannuation legislation.

2.11 The objective of the SMSF auditor registration regime is to raise the standard of SMSF auditor competency and ensure there is a set of minimum standards that apply across the entire sector. Registration will identify, formally recognise and enable the provision of tailored support to SMSF auditors that are currently producing high quality audits.

2.12 Schedule 2 to the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 and the Superannuation Auditor Registration Imposition Bill 2012implement the Government's response to the Review's recommendations in relation to SMSF auditor registration and auditor independence.

Summary of new law

2.13 Schedule 2 to the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012:

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introduces a new definition of an approved SMSF auditor;

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sets out who may apply for registration as an approved SMSF auditor and the requirements a person must meet before ASIC grants an application for registration as an approved SMSF auditor;

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provides ASIC with the ability to place conditions on an auditor's registration and the ability to cancel a person's registration in certain circumstances;

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sets out the ongoing obligations of approved SMSF auditors including:

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meeting professional obligations;

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submitting annual statements to ASIC; and

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notifying ASIC of certain matters;

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sets out the type of registers to be kept by ASIC and what information is to be entered on these registers;

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provides for information to be shared between ASIC and the ATO;

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provides ASIC with the power to determine and set competency standards which are to be complied with by all approved SMSF auditors;

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sets out the fees which are proposed by the Superannuation Auditor Registration Imposition Bill 2012;

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provides ASIC with the ability to issue disqualification and suspension orders to approved SMSF auditors under certain circumstances;

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amends the existing penalties for those who hold themselves out as an approved auditor to align with the new registration regime; and

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provides the ATO and ASIC with relevant monitoring and investigation powers.

Comparison of key features of new law and current law

Detailed explanation of new law

General administration

2.14 Schedule 2 to the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 amends section 6 of the SIS Act to provide for the general administration of the new and amended provisions relating to auditors of SMSFs by ASIC and the Commissioner. [Schedule 2, item 1, paragraph 6(1)(a)]

2.15 ASIC will have the general administration of Part 16 (other than Division 2 and section 128P) to the extent that it relates to auditors of SMSFs. [Schedule 2, item 2, paragraph 6(1)(da)]

2.16 The Commissioner will have the general administration of Division 2 of Part 16 and section 128P. [Schedule 2, item 3, subparagraph 6(1)(e)(v)]

2.17 The Commissioner will retain the general administration of Part 16 (other than section 128N) to the extent that it relates to SMSFs and that administration is not conferred on ASIC. This is to ensure the Commissioner remains the Regulator of actuaries of SMSFs. [Schedule 2, item 4, paragraph 6(1)(ea)]

Definitions

2.18 An approved auditor in relation to a superannuation entity that is an SMSF means an approved SMSF auditor. [Schedule 2, item 5, subsection 10(1)]

2.19 An approved SMSF auditor means a person who is registered under section 128B but does not include a person for whom an order disqualifying the person from being an approved SMSF auditor, or suspending the person's registration as an approved SMSF auditor, is in force under section 130F or a person who is disqualified from being or acting as an auditor of all superannuation entities under section 130D. [Schedule 2, item 6, subsection 10(1)]

2.20 An SMSF auditor number of an approved SMSF auditor means the number stated in the certificate of registration given by ASIC relating to the auditor's registration. [Schedule 2, item 7, subsection 10(1)]

2.21 A suspended SMSF auditor means a person for whom an order suspending a person's registration as an approved SMSF auditor is in force under section 130F. [Schedule 2, item 8, subsection 10(1)]

Registration of approved SMSF auditors

2.22 Schedule 1 inserts Division 1A - Approved SMSF auditors. [Schedule 2, item 9, Division 1A]

2.23 Schedule 1 inserts Subdivision A - Registration of approved SMSF auditors. [Schedule 2, item 9, Subdivision A]

2.24 A natural person who is an Australian resident may apply to ASIC for registration as an approved SMSF auditor. The application must be in the approved form which can require electronic lodgement. ASIC will have the ability to request the applicant to give ASIC further information relating to their application within a specified time. If the applicant does not provide ASIC with that information within that time, the applicant is taken to have withdrawn their application. [Schedule 2, item 9, section 128A]

2.25 Subject to meeting the requirements noted in paragraph 2.26, ASIC must grant an application for registration as an approved auditor and register the applicant if the applicant has:

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the qualifications prescribed by the regulations;

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the practical experience prescribed by the regulations; and

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passed a competency examination in accordance with section 128C.

[Schedule 2, item 9, paragraph 128B(1)(a)]

2.26 Before granting registration, ASIC must also be satisfied that the applicant is capable of performing the duties of an approved SMSF auditor. The duties of an approved SMSF auditor include those under the SIS Act, as well as any duties required of an auditor by their position or occupation under any other Commonwealth, state or territory law. [Schedule 2, item 9, subparagraph 128B(1)(b)(i)]

2.27 ASIC must also be satisfied that the applicant is unlikely to contravene the obligations of an approved SMSF auditor under Subdivision B. These include professional obligations such as undertaking continuing professional development, complying with competency and independence standards, lodging annual statements with ASIC and notifying ASIC of certain matters. [Schedule 2, item 9, subparagraph 128B(b)(ii)]

2.28 Finally, ASIC must be satisfied that the applicant is a fit and proper person to be an approved SMSF auditor. The concept of fit and proper is not defined in the SIS Act, however it has been considered by the courts on a number of occasions. Whether a person is a fit and proper person to be an approved SMSF auditor is ascertained by an evaluation of whether the person has the appropriate knowledge, skills, experience, competence, judgement, character, honesty and integrity to be, or remain, registered. [Schedule2, item 9, subparagraph 128B(1)(b)(iii)]

2.29 A prescriptive approach cannot be applied to such a determination. ASIC must make a decision as to whether a person is fit and proper to be an approved SMSF auditor based on an evaluation of all the particulars of each case. However, relevant considerations in determining whether a person is a fit and proper person to be an approved SMSF auditor may include whether the person:

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has carried out or performed adequately and properly, the duties and functions of an approved SMSF auditor;

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has been or is currently subject to disciplinary action, including, but not limited to, suspension and exclusion from practice, by a regulatory body or a professional association;

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has been or is currently disqualified or banned under provisions of an Act or legislative instrument under Commonwealth, state or territory law;

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has been or is currently the subject of administrative, civil or enforcement action, which were determined adversely (including consenting to an order or direction, or giving an undertaking not to engage in unlawful or improper conduct) in any country;

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has been convicted or have legal proceedings pending for any criminal offences, any acts of dishonesty (such as theft or fraud), any breach of trust or fiduciary duty, any professional misconduct or other misconduct;

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has served a term of imprisonment;

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has been obstructive, misleading or untruthful in dealing with regulatory bodies, or a court;

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has failed to deal with conflicts of interest appropriately; or

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has or has had the status of undischarged bankrupt or insolvent under administration, or there is any such action pending.

The above matters are not meant to be an exhaustive list. The relevance and weighting given to these considerations (or any other relevant factors) may vary according to each person's circumstances, and no one factor will be determinative in all cases. ASIC may provide further guidance in determining whether a person is fit and proper.

2.30 ASIC will have the ability to exempt a person from a requirement in paragraph 128B(1)(a) and grant the person's application for registration as an approved SMSF auditor and register the person. However, this does not preclude ASIC from placing a condition on that person's registration, such as completing a course of education or training specified by ASIC, relating to the exemption provided. [Schedule 2, item 9, subsection 128B(2)]

2.31 ASIC is not required to grant an application for registration if the applicant does not meet a requirement listed in paragraph 128B(1)(a) unless it exercises its discretion under subsection 128B(2). In any case, if the applicant does not meet the requirements of paragraph 128B(1)(b), ASIC must refuse the application. [Schedule 2, item 9, subsection 128B(3)]

2.32 Additionally, ASIC must refuse an application for registration if the applicant is a person for whom a disqualification order or a suspension order is in force under section 130F or a person who is disqualified from being or acting as an auditor of all superannuation entities under section 130D. [Schedule 2, item 9, subsection 128B(4)]

2.33 ASIC's decision under section 128B to refuse an application for registration as an approved SMSF auditor under section 128A is a reviewable decision under the SIS Act.If ASIC refuses an application for registration, it must, no later than 14 days after the decision, give to the applicant a notice in writing setting out the decision and reasons for it. [Schedule 2, item 9, subsection 128B(5)]

2.34 If ASIC grants an application for registration, it must, no later than 14 days after granting the application, issue the applicant a certificate stating that the applicant has been registered as an approved SMSF auditor, stating the applicant's SMSF auditor number and specifying the day on which the application was granted. [Schedule 2, item 9, subsection 128B(6)]

2.35 A failure by ASIC to issue the applicant with a certificate within 14 days does not affect the validity of the decision. [Schedule 2, item 9, subsection 128B(7)]

2.36 A person's registration as an approved SMSF auditor takes effect at the beginning of the day in the certificate as the day the application is granted. The person's registration remains in force (except while the registration is suspended) unless ASIC cancels the person's registration, an order disqualifying the person from being an approved SMSF auditor comes into force, an order disqualifying the person from being or acting as an approved auditor comes into force under section 130D or the person dies. [Schedule 2, item 9, subsection 128B(8)]

2.37 A person will be required to undertake and pass a competency examination conducted by or on behalf of ASIC in the 12 months prior to making an application to become registered as an approved SMSF auditor. The person will be allowed two attempts to pass the examination within that 12 month period. Transitional provisions will apply for existing approved auditors as explained in paragraphs 2.158 to 2.161. [Schedule 2, item 9, section 128C]

Conditions on registration

2.38 ASIC will have the ability to impose conditions, or additional conditions, on a person's registration as an approved SMSF auditor and to vary or revoke conditions imposed on the person's registration, and may do so at any time. For example, ASIC may grant a person's application for registration as an approved SMSF auditor and immediately impose a condition on that registration. ASIC may also impose conditions on a person's registration as an approved SMSF auditor if that auditor has been found not to have met an obligation under the SIS Act. [Schedule 2, item 9, section 128D(1)]

2.39 ASIC will have the ability to impose, vary or revoke conditions on its own initiative or on application by an approved SMSF auditor provided the application is accompanied by any documents prescribed by the regulations. [Schedule 2, item 9, subsection 128D(2)]

2.40 ASIC's decision to impose or vary conditions, or additional conditions, on a person's registration and ASIC's decision to refuse an application to vary or revoke conditions, or additional conditions, on a person's registration is a reviewable decision under the SIS Act.

2.41 ASIC is not limited to the nature or type of conditions that may be placed on a person's registration. The nature and type of conditions that may be placed on a person's registration will be determined on a case by case basis.

2.42 Conditions may include requiring the person to complete a course of education or training or requiring the person to undertake and pass a competency examination within a time frame specified by ASIC. [Schedule 2, item 9, subsection 128D(3)]

Cancelling registration

2.43 A person's registration remains in force (except while the registration is suspended) unless, among other events, ASIC cancels the person's registration. ASIC can apply its discretion in cancelling a person's registration. If a person's registration is cancelled, that person may make another application to become registered as an approved SMSF auditor at a later time.

2.44 ASIC may cancel a person's registration as an approved SMSF auditor if the person requests ASIC to do so in writing. [Schedule 2, item 9, subsection 128E(1)]

2.45 ASIC will also have the ability to cancel a person's registration if it is satisfied that the person has failed to comply with a condition imposed on their registration. There may be circumstances where failure to meet a condition of registration is not serious enough to warrant ASIC issuing a disqualification order against a person. This power gives ASIC the flexibility to deal with non-compliance with a condition on registration by cancelling the person's registration. Cancellation will allow the person to reapply for registration as an approved SMSF auditor in the future. [Schedule 2, item 9, paragraph 128E(2)(a)]

2.46 ASIC may cancel a person's registration as an approved SMSF auditor if it is satisfied that the person has not performed any significant audit work during a continuous period of five years and as a result has ceased to have the practical experience necessary for carrying out audits of SMSFs. Whether a person meets this criteria will be assessed by ASIC on a case by case basis. Practical experience, prescribed by the regulations, is one of the requirements under section 128B for registration as an approved SMSF auditor. [Schedule 2, item 9, paragraph 128E(2)(b)]

2.47 In determining whether a person has performed any significant audit work, ASIC may have regard to factors including:

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the number of SMSF audits the person has signed or undertaken work on; and

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the nature of the SMSFs the person signs the audit report for or undertakes audit work on. For example, the value and nature of the fund's assets and arrangements may indicate the type of work and knowledge exercised by the person.

2.48 ASIC may cancel a person's registration as an approved SMSF auditor if it is satisfied that the person has failed to comply with their obligation to give ASIC a statement under section 128G. [Schedule 2, item 9, paragraph 128E(2)(c)]

2.49 ASIC may also cancel a person's registration as an approved SMSF auditor if the person ceases to be an Australian resident. This is consistent with registration requirements where only Australian residents may apply for registration. [Schedule 2, item 9, paragraph 128E(2)(d)]

2.50 ASIC must, not later than 14 days after deciding to cancel the registration, give the person a written notice setting out the decision and reasons for it. The decision takes effect at the end of the day on which the notice is given to the person. ASIC's decision to cancel an approved SMSF auditor's registration is a reviewable decision under the SIS Act. [Schedule 2, item 9, subsections 128E(3) and (4)]

2.51 A failure by ASIC to give the person written notice setting out the decision and reasons for it within 14 days does not affect the validity of the decision. [Schedule 2, item 9, subsection 128E(5)]

Obligations of approved SMSF auditors

2.52 Approved SMSF auditors will be required to meet a range of ongoing obligations relating to their training, competency and independence as well as their registration with ASIC. Schedule 1 inserts new Subdivision B - Obligations of approved SMSF auditors. [Schedule 2, item 9, Subdivision B]

Professional obligations

2.53 Approved SMSF auditors will be required to complete the continuing professional development requirements prescribed by the regulations. This ongoing training is necessary to ensure auditors refresh and update their knowledge necessary for undertaking SMSF audits. [Schedule 2, item 9, paragraph 128F(a)]

2.54 Approved SMSF auditors must hold a current policy of professional indemnity insurance, of a level prescribed by the regulations, for claims that may be made against the auditor in connection with audits of SMSFs. [Schedule 2, item 9, paragraph 128F(b)]

2.55 Approved SMSF auditors must comply with any competency standards issued by ASIC under section 128Q as a condition on registration. This will ensure all approved SMSF auditors are subject to the same, minimum competency standards necessary for the conduct of SMSF audits. [Schedule 2, item 9 subparagraph 128F(c)(i)]

2.56 Approved SMSF auditors must comply with any auditing standards made by the Auditing and Assurance Standards Board (AUASB) under section 336 of the Corporations Act 2001 that are applicable to the duties of an approved SMSF auditor. [Schedule 2, item 9, subparagraph 128F(c)(ii)]

2.57 Approved SMSF auditors must comply with any auditing and assurance standards formulated by the AUASB under section 227B of the Australian Securities and Investments Commission Act 2001 that are applicable to the duties of an approved SMSF auditor. [Schedule 2, item 9, subparagraph 128F(c)(iii)]

2.58 The AUASB has issued Guidance Statement GS 009 Auditing of Self-Managed Superannuation Funds pursuant to section 227Bto provide guidance to auditors conducting audits of SMSFs in how to understand and comply with the relevant standards.

2.59 Approved SMSF auditors must also comply with the auditor independence requirements prescribed by the regulations. This requirement is intended to ensure that approved SMSF auditors can be relied upon to provide an objective assessment of compliance with the superannuation legislation. [Schedule 2, item 9, paragraph 128F(d)]

Annual statements

2.60 An approved SMSF auditor must give to ASIC an annual statement in the approved form which can require electronic lodgement. This requirement will continue to apply whether or not the person is a suspended SMSF auditor. ASIC may extend the period for giving the statement. [Schedule 2, item 9, section 128G]

2.61 Approved SMSF auditors will be required to disclose certain information in the annual statement, for example a declaration of whether the auditor has adhered to independence standards and the number of SMSF audit reports that the person has signed over the relevant period.

Notification of certain matters

2.62 An approved SMSF auditor will be required to notify ASIC of certain matters no later than 21 days after the occurrence of the event concerned. Auditors must notify ASIC using the approved form which may require electronic lodgement. This requirement will continue to apply whether or not the person is a suspended SMSF auditor. However, subparagraph 128H(a)(i), which requires an approved SMSF auditor to notify ASIC when they cease to practice, will not apply to a suspended SMSF auditor. [Schedule 2, item 9, section 128H]

2.63 This requirement is intended to ensure ASIC is informed of circumstances that affect a person's registration, such as residency status and that the details held by ASIC and available on the register of approved SMSF auditors are kept up to date.

Registers

2.64 Schedule 2 inserts new Subdivision C - Registers. ASIC must establish and maintain a Register of Approved SMSF Auditors and a Register of Disqualified SMSF Auditors for the purposes of the SIS Act. [Schedule 2, item 9, Subdivision C]

2.65 ASIC must cause a register of approved SMSF auditors to be kept for the purposes of the SIS Act. [Schedule 2, item 9, subsection 128J(1)]

2.66 Details of approved SMSF auditors and suspended SMSF auditors will be placed on the register by ASIC. These details include the person's name, the day the person's registration took effect, address details and details of a person's suspension. ASIC will also have the ability to place other details it considers appropriate on the register of approved SMSF auditors. [Schedule 2, item 9, subsection 128J(2)]

2.67 If the person ceases to be an approved SMSF auditor, for example if their registration has been cancelled or ASIC has issued an order disqualifying the person from being and acting as an approved SMSF auditor, ASIC must remove the person's name and any other particulars that are entered on the register of approved SMSF auditors. [Schedule 2, item 9, subsection 128J(3)]

2.68 A person may inspect and make copies of, or take extracts from the register of approved SMSF auditors. [Schedule 2, item 9, subsection 128J(4)]

2.69 ASIC must cause a register of Disqualified SMSF Auditors to be kept for the purposes of the SIS Act. Details such as the name and last known contact details for each person for whom an order disqualifying the person from being an approved SMSF auditor is in force under section 130F will be placed on this register. Where a disqualification order has been revoked ASIC will remove the details, such as the person's name and other particulars relating to the person, from the Disqualified SMSF Auditors register. A person may inspect and make copies of, or take extracts from the register of Disqualified SMSF auditors. [Schedule 2, item 9, section 128K]

2.70 A search of the Register of Approved SMSF Auditors and the Register of Disqualified SMSF Auditors that ASIC makes available online will not be subject to a fee.

Fees

2.71 Schedule 2 inserts new Subdivision D - Fees which sets out the fees payable under the provisions. [Schedule 2, item, 9, Subdivision D]

2.72 A fee imposed under the Superannuation Auditor Registration Imposition Bill 2012 is payable for matters mentioned in an item in column 1 of the table in subsection 128L(1). The fee is payable by the person referred to in the corresponding item in column 2 of the table in subsection 128L(1). [Schedule 2, item 9, subsection 128L(1)]

2.73 Fees are payable for:

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applying for registration as an approved SMSF auditor. The fee is payable by the applicant;

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undertaking a competency examination in accordance with section 128C. The fee is payable by the person undertaking the examination;

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giving to ASIC a statement under section 128G. The fee is payable by the person giving the statement;

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giving to ASIC a statement under section 128G within one month after it fell due. This fee is in addition to the fee payable for giving ASIC the statement under section 128G. The fee is payable by the person giving the statement;

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giving to ASIC a statement under section 128G more than one month after it fell due. This fee is in addition to the fee payable for giving ASIC the statement under section 128G. The fee is payable by the person giving the statement;

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giving ASIC particulars under section 128H within one month after they fell due. The fee is payable by the person giving the particulars;

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giving ASIC particulars under section 128H more than one month after they fell due. The fee is payable by the person giving the particulars; and

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inspecting or searching a register that ASIC keeps under Division 1A. For example, a fee will be payable for an extract that includes historical information such as previous principal place of business of an approved SMSF auditor. The fee is payable by the person who requests the inspection or search.

2.74 Approved SMSF auditors will be liable for additional fees if they do not submit their annual statements on time or fail to notify ASIC of certain matters on time. This is intended to deter approved auditors from not meeting their obligations on time and penalise those who fail meet their obligations on time.

2.75 The fee is payable to ASIC on behalf of the Commonwealth. [Schedule 2, item 9, subsection 128L(2)]

2.76 The fee is due and payable on the day prescribed by the regulations. [Schedule 2, item 9, subsection 128L(3)]

2.77 ASIC may, on behalf of the Commonwealth, waive payment of the whole or part of the fee by its own initiative or on written application by the person. ASIC's decision to refuse an application to waive full or part payment of a fee is a reviewable decision. [Schedule 2, item 9, subsection 128L(4)]

2.78 If a fee is payable under section 128L (other than a matter referred to in item 8 of the table in subsection 128L(1)), the matter is taken, for the purposes of the Superannuation Auditor Registration Imposition Bill 2012(other than section 128J), not to have occurred until the fee is paid. [Schedule 2, item 9, subsection 128L(5)]

2.79 ASIC may, on behalf of the Commonwealth, recover a debt due under section 128L. [Schedule 2, item 9, subsection 128L(6)]

2.80 Nothing in a law passed before the commencement of section 128L exempts a person from a liability to pay a fee under section 128L. [Schedule 2, item 9, subsection 128L(7)]

2.81 A law, or a provision of a law, passed after the commencement of section 128L that purports to exempt a person from liability to pay taxes under laws of the Commonwealth or to pay certain taxes under those laws that include fees payable under section 128L is not to be construed as exempting the person from liability to pay fees payable under section 128L, unless the law or provision that expressly exempts a person from liability to pay such fees. [Schedule 2, item 9, subsection 128L(8)]

2.82 If a fee is payable under section 128L for inspecting or searching a register that ASIC keeps under this Division as referred to in item 8 of the table in subsection 128L(1), ASIC may refuse to do the act until the fee is paid. [Schedule 2, item 9, subsection 128M(1)]

2.83 To avoid doubt, nothing in Division 1A, and nothing done under Division 1A imposes on ASIC a duty to allow the inspection or search of a register, or to make available information, or confers a right to inspect or search a register or to have information made available except so far as such a duty or right would, but for the effect of section 128M, exist under a provision of the SIS Act (other than a provision of Division 1A) or under some other law. [Schedule 2, item 9, subsection 128M(2)]

Miscellaneous

2.84 Schedule 2 inserts new Subdivision E - Miscellaneous [Schedule 2, item 9, Subdivision E]

Disclosure of information to the Commissioner

2.85 ASIC may disclose information, given to it in or in connection with the performance of its functions or the exercise of its powers under Part 16 or Part 25, to the Commissioner for the purposes of administering the provisions of the SIS Act. [Schedule 2, item 9, section 128N]

2.86 This provision is intended to enable ASIC to share information relevant to approved SMSF auditors with the Commissioner to ensure each may perform its role effectively. Information provided to the Commissioner will enable the ATO to identify and monitor persons registered as approved SMSF auditors and administer other parts of the SIS Act.

2.87 A disclosure of information permitted by this section is an authorised disclosure for the purposes of subsection 127(2) of the Australian Securities and Investments Commission Act 2001 .

Commissioner may refer matters to ASIC

2.88 The Commissioner will be responsible for monitoring approved SMSF auditors and other matters relating to the conduct of an SMSF audit by a person other than an approved SMSF auditor. The Commissioner will undertake compliance activities to determine whether the obligations and prohibitions established under Part 16 have been adhered to.

2.89 In cases where the Commissioner is of the opinion that:

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an approved SMSF auditor is not a fit and proper person to be an approved SMSF auditor;

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in relation to the conduct of an audit of an SMSF, a person has contravened the SIS Act or regulations; or

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a person who conducted, or is conducting the audit has failed to carry out or perform adequately and properly the duties of an auditor under the SIS Act or the regulations or any duties required by a law of the Commonwealth, a state or a territory to be carried out or performed by an auditor or any functions that an auditor is entitled to perform in relation to the SIS Act or the regulations or the Financial Sector (Collection of Data) Act 2001 ;

the Commissioner may refer the details of the matter to ASIC. [Schedule 2, item 9, subsection 128P(1)]

2.90 The Commissioner may exercise the power under subsection 128P(1) in relation to an approved SMSF auditor whether or not an order disqualifying or suspending the approved SMSF auditor has been made under section 130F. [Schedule 2, item 9, subsection 128P(2)]

2.91 If the Commissioner refers details of a matter to ASIC, the Commissioner must, as soon as practicable but, in any event, not later than 14 days after the referral, by notice in writing given to the auditor or person concerned, inform the auditor or person of the fact that a matter has been referred and of the nature of the matter so referred. [Schedule 2, item 9, subsection 128P(3)]

2.92 Once a matter is referred to ASIC, ASIC will be responsible for determining what, if any penalty or other enforcement action should be applied, for example whether a condition should be placed on the person's registration or whether a disqualification order should be issued. ASIC will decide what action to take on a matter referred by the Commissioner on a case by case basis.

Competency standards

2.93 ASIC may, by legislative instrument, determine competency standards to be complied with by all approved SMSF auditors. [Schedule 2, item 9, subsection 128Q(1)]

2.94 A competency standard may impose different requirements to be complied with in different situations or in respect of different activities. [Schedule 2, item 9, subsection 128Q(2)]

2.95 ASIC is not limited in its ability to determine competency standards. The competency standards may cover matters such as the conduct of audits, professional obligations of approved SMSF auditors and the knowledge of and compliance with laws applying to approved SMSF auditors. [Schedule 2, item 9, subsection 128Q(3)]

2.96 A competency standard may make provision in relation to a matter by applying, adopting or incorporating, with or without modification, a matter contained in an instrument or writing as in force or existing at a particular time or as in force or existing from time to time. This has effect despite anything in subsection 14(2) of the Legislative Instruments Act 2003 . [Schedule 2, item 9, subsections 128Q(4) and (5)]

2.97 This provision gives ASIC the ability to set minimum standards applicable to all approved SMSF auditors. All approved SMSF auditors will be required to comply with these standards as part of their professional obligations.

2.98 The Commissioner will undertake compliance activities to determine whether approved SMSF auditors have adhered to these standards. An approved SMSF auditor who is found to be non-compliant with these standards may face referral to ASIC to determine appropriate enforcement action such as having a condition placed on their registration, having their registration suspended, or having a disqualification order issued against them.

Disqualification and suspension orders

2.99 ASIC may make a written order disqualifying a person from being an approved SMSF auditor, or suspending a person's registration as an approved SMSF auditor under certain circumstances. [Schedule 2, item 10, subsection 130F(1)]

2.100 ASIC may make a disqualification or suspension order if the person has failed, whether within or outside Australia, to carry out or perform adequately and properly:

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the duties of an auditor under the SIS Act or regulations. This includes all the obligations and requirements on approved SMSF auditors in Part 16;

•

any duties required by the law of the Commonwealth, a state or a territory to be carried out or performed by an auditor; or

•

any functions that an auditor is entitled to perform in relation to the SIS Act or the regulations or the Financial Sector (Collection of Data) Act 2001 . [Schedule 2, item 10, paragraph 130F(2)(a)]

2.101 ASIC may also make a disqualification or suspension order if the person has failed to comply with a condition or additional condition, imposed under section 128D on the person's registration as an approved SMSF auditor. [Schedule 2, item 10, paragraph 130F(2)(b)]

2.102 ASIC may also make a disqualification or suspension order if the person has made a false declaration in their application for registration as an approved SMSF auditor or in their annual statement given to ASIC. [Schedule 2, item 10, paragraph 130F(2)(c)]

2.103 ASIC may also make a disqualification or suspension order if the person is not fit and proper to be an approved SMSF auditor for the purposes of the SIS Act. Fit and proper is discussed at paragraphs 1.28 and 1.29. Consideration of matters relevant to whether a person is fit and proper to be registered as an approved SMSF auditor are equally relevant to determining whether a person should be disqualified or suspended. [Schedule 2, item 10, paragraph 130F(2)(d)]

2.104 ASIC's decision to make a disqualification or suspension order is a reviewable decision.

2.105 ASIC must give a copy of the order to the person. [Schedule 2, item 10, subsection 130F(3)]

2.106 The order takes effect on the day specified in the order. The specified day must be within the 28 day period beginning on the day on which the order was made. [Schedule 2, item 10, subsection 130F(4)]

2.107 If ASIC decides to make an order under section 130F disqualifying a person from being an approved SMSF auditor, ASIC must cause a copy of the order to be published in the Gazette as soon as practicable after it is made. [Schedule 2, item 10, subsection 130F(5)]

2.108 If ASIC's decision to make the disqualification order is varied or revoked by ASIC as a result of a reconsideration of its decision under subsection 344(4), ASIC must cause a notice of the variation or revocation to be published in the Gazette as soon as practicable after the decision is made. [Schedule 2, item 10, subsection 130F(6)]

2.109 If ASIC's decision to make the disqualification order is confirmed or varied by ASIC as a result of a reconsideration under subsection 344(4) and the decision as so confirmed or varied is varied or set aside by the Administrative Appeals Tribunal, ASIC must cause a notice of the Tribunal's decision to be published in the Gazette as soon as practicable after it is made. [Schedule 2, item 10, subsection 130F(7)]

2.110 ASIC may revoke a disqualification or suspension order under section 130F. ASIC's power to revoke may be exercised on ASIC's own initiative or on written application made by the person disqualified or suspended. ASIC's decision to refuse an application to revoke an order is a reviewable decision under the SIS Act. [Schedule 2, item 10, subsection 130F(8)]

2.111 If an application is made for the revocation of an order, ASIC must decide to revoke the order or refuse to revoke the order. [Schedule 2, item 10, subsection 130F(9)]

2.112 ASIC must not revoke an order unless it is satisfied that the person concerned is likely to carry out and perform adequately and properly the duties of an approved SMSF auditor under the SIS Act or the regulations and the person is otherwise a fit and proper person to be an approved SMSF auditor for the purposes of the Act. [Schedule 2, item 10, subsection 130F(10)]

2.113 A revocation of an order takes effect on the day the revocation is made. [Schedule 2, item 10, subsection 130F(11)]

2.114 If ASIC decides to refuse an application for revocation of an order, it must cause to be given to the applicant a written notice setting out the decision and giving the reasons for the decision. [Schedule 2, item 10, subsection 130F(12)]

2.115 If anorder that ASIC revokes is an order disqualifying a person from being an approved SMSF auditor, ASIC must cause particulars of the revocation to be published in the Gazette as soon as practicable after it occurs. [Schedule 2, item 10, subsection 130F(13)]

2.116 A person for whom a suspension order is in force will be prevented from auditing SMSFs until their suspension ends. The making of a suspension order does not preclude ASIC from taking any other action against that auditor for the same matter for which the suspension order was made. For example a condition may be placed on the person's registration when their suspension ends.

2.117 A person for whom a suspension order is in force must still comply with their obligations in respect of submitting annual statements and notifying ASIC of certain matters.

2.118 A person for whom a disqualification order is in force will be prevented from auditing SMSFs unless that order is revoked. Such a person will no longer meet the definition of approved SMSF auditor in subsection 10(1) and may not be appointed by SMSF trustees to give an audit report as required under section 35C.

2.119 Details of a person for whom a disqualification order is made will be placed on the Register of Disqualified SMSF Auditors. Such details will only be removed from this register if the disqualification order is revoked.

2.120 A person for whom a disqualification or suspension order is in force cannot have a subsequent application for registration as an approved SMSF auditor granted unless that order is revoked - see subsection 128B(4).

Other amendments

Superannuation Industry (Supervision) Act 1993

Powers and duties conferred by Part 25

2.121 Powers and duties are conferred by Part 25 on ASIC for the purposes of ASIC's administration of the provisions it administers. This includes for the purpose of administering Part 16, to the extent ASIC has the general administration over that Part.

2.122 However, powers and duties conferred on ASIC by section 255 are conferred only in relation to persons who are relevant persons in relation to superannuation entities. [Schedule 2, item 11, paragraph 6(2AA)(a)]

2.123 Additionally, powers and duties conferred on ASIC by section 256 are conferred only in relation to the affairs of superannuation entities. [Schedule 2, item 11, paragraph 6(2AA)(b)]

2.124 Powers and duties are also conferred on the Commissioner by Part 25 (other than Division 3) for the purposes of the administration of the provisions he or she administers.

2.125 However, powers and duties conferred on the Commissioner by Divisions 4 to 8 of Part 25 are conferred only in relation to persons who are relevant persons in relation to superannuation entities and the affairs of superannuation entities. The exception to this is section 285 in Division 7 which is conferred on the Commissioner in relation to the superannuation entities, approved SMSF auditors and the conduct of audits of SMSFs. [Schedule 2, item 12, subsection 6(2AB)]

Definitions

2.126 A natural person who is an Australian resident may apply for registration as an approved SMSF auditor. Australian resident means a person who is a resident of Australia for the purposes of the Income Tax Assessment Act 1936 . [Schedule 2, item 13, subsection 10(1)]

2.127 The term 'relevant person' is primarily used in Part 25 in relation to the exercise of monitoring and investigation powers under that Part. Schedule 2 makes amendments to the definition of relevant person to define a relevant person in relation to an approved SMSF auditor and an audit of an SMSF.

2.128 The definition of relevant person in relation to an approved SMSF auditor includes the approved SMSF auditor and a person who is a relevant person in relation to an SMSF of which the approved SMSF auditor is or was an auditor. [Schedule 2, item 14, subsection 10(1), definition of relevant person]

2.129 The definition of relevant person in relation to an audit of an SMSF includes the person who is conducting, or conducted the audit and a person who is a relevant person in relation to the SMSF. [Schedule 2, item 15, subsection 10(1) definition of relevant person]

2.130 Schedule 2 amends the definition of reviewable decision to include certain decisions made by ASIC under Part 16. This is to ensure a person affected by such a decision can request ASIC to reconsider the decision under section 344. [Schedule 2, item 15, subsection 10(1), definition of reviewable decision]

Audits of accounts and statements

2.131 From 31 January 2013, trustees of SMSFs must appoint an approved SMSF auditor to give the trustees a report as required by subsection 35C(1) regardless of the year of income the report is in relation to. Transitional provisions will apply for existing approved auditors as explained in paragraphs 1.158 to 1.161. [Schedule 2, item 16, end of subsection 35C(1)]

2.132 This item amends subsection 35C(1A) to ensure it applies to superannuation entities other than SMSFs. [Schedule 2, item 17, subsection 35C(1A)]

2.133 The report given by an approved SMSF auditor to an SMSF trustee must be in the approved form. The approved form must include a statement by the auditor as to the extent of their compliance with the auditor independence requirements referred to in paragraph 128F(d). [Schedule 2, item 18, paragraph 35C(5)(ba)]

2.134 An auditor commits an offence if the auditor contravenes subsection 35C(6) and the entity is not a self-managed superannuation fund and the auditor is not an approved SMSF auditor. [Schedule 2, item 19, subsection 35C(7)]

Commissioner may issue disqualification orders under section 131 to actuaries of SMSFs only

2.135 Schedule 2 amends section 131 to remove references to approved auditors. The Commissioner will have the ability to issue a disqualification order under section 131 in relation to actuaries of SMSFs only. [Schedule 2, items 20 to 30, section 131]

2.136 APRA may direct the removal of an auditor of a superannuation entity that is not an SMSF. [Schedule 2, item 31, subsection 131AA(1)]

Referral to professional associations

2.137 Regulators may refer details of an auditor to a professional association in certain circumstances. This section will not apply in relation to approved auditors of SMSFs. This does not preclude professional associations from applying to ASIC for certain information. [Schedule 2, items 32 and 33, subsection 131A(1)]

Offence of holding oneself out as an auditor

2.138 A person commits an offence if the person holds themselves out as an approved SMSF auditor and the person is not an approved SMSF auditor, or the person holds themselves out as an approved auditor of another kind other than an approved SMSF auditor and the person is not such an approved auditor. The person who commits such an offence may be liable to a penalty of 50 penalty units. The offences are strict liability offences under the SIS Act. [Schedule 2, items 34 to 36, section 131B]

2.139 A person who provides an SMSF trustee with a report which states an SMSF auditor number which is not their own, or a person who advertises as a registered SMSF auditor when they are not, may indicate that that person has held themselves out as an approved SMSF auditor. Additionally, a person who misuses a SMSF auditor number on a SMSF annual return may indicate that the person has held themselves out as an approved SMSF auditor.

2.140 A person commits an offence if the person is, or acts as an auditor of a self-managed superannuation fund for the purposes of the SIS Act and that person is disqualified or suspended under section 130F from being an approved SMSF auditor and that person knows that he or she is disqualified or suspended. This offence may result in imprisonment for 2 years or a penalty of 60 penalty units. [Schedule 2, items 37 to 40, section 131C]

Monitoring and investigation

2.141 Part 25 currently deals with monitoring and investigation of superannuation entities only. Schedule 2 makes amendments to relevant monitoring and investigation provisions to provide ASIC and the Commissioner appropriate monitoring and investigation powers in relation to approved SMSF auditors and audits of SMSFs conducted by persons other than approved SMSF auditors. [Schedule 2, item 41, Part 25 (heading)]

2.142 In broad terms, the Commissioner will undertake a monitoring role with regard to the obligations and requirements placed on approved SMSF auditors as well as other conduct relating to the audit of an SMSF such as the prohibition of holding oneself out as an approved SMSF auditor. As part of the Commissioner monitoring role, he or she will have the ability to refer matters to ASIC.

2.143 Additionally, as part of its responsibilities for the registration of approved SMSF auditors ASIC will have the ability not only to take enforcement action under Part 16, but will also have the ability to accept enforceable undertakings and conduct investigations on an approved SMSF auditor or in relation to an audit of an SMSF.

2.144 The objects of Part 25 include ensuring that the Regulator has sufficient power to monitor approved SMSF auditors and audits of SMSFs. The Regulator for this purpose is the Commissioner. [Schedule 2, item 42, paragraph 253(a)]

2.145 The objects of Part 25 include authorising the Regulator to conduct an investigation of the whole or part of the affairs of an approved SMSF auditor or the conduct of an audit of an SMSF. The Regulator for this purpose is ASIC. [Schedule 2, item 43, paragraph 253(c)]

2.146 Schedule 2 inserts notes at the end of section 253to clarify that:

•

Sections 254 and 264 and Division 3 apply to monitoring and investigating of superannuation entities only;

•

ASIC's powers and duties as the Regulator under sections 255 and 256 do not apply to monitoring approved SMSF auditors or audits of SMSFs. These powers and duties are conferred on the Commissioner; and

•

with the exception of section 285 in Division 7 of Part 25, the Commissioner of Taxation's powers and duties as the Regulator under Divisions 4 to 8 apply only to investigating superannuation entities. They do not apply to investigating approved SMSF auditors or audits of SMSFs. These powers and duties are conferred on ASIC. [Schedule 2, item 44, at the end of section 253]

2.147 Notices may be given to former relevant persons in relation to an approved SMSF auditor or in relation to an audit of an SMSF. [Schedule 2, items 45 and 46, section 253A]

2.148 Schedule 2 amends the heading of Division 2 to Division 2 - Monitoring. [Schedule 2, item 47, Division 2 of Part 25 (heading)]

2.149 Schedule 2 amends section 255 to enable the Regulator (in this case, being the Commissioner) to require the production of any books relating to the affairs of an approved SMSF auditor or an audit of an SMSF. A notice may be given to a relevant person in relation to an approved auditor or an audit of an SMSF. [Schedule 2, item 48, subsection 255(1)]

2.150 The Commissioner may exercise his or her powers under section 255 in relation to an approved SMSF auditor or in relation to an audit of an SMSF even though an investigation is being conducted under section 263 of the whole or a part of the affairs of the auditor or the conduct of the audit. [Schedule 2, item 49, subsection 255(4)]

2.151 Schedule 2 amends section 256 to enable an authorised person to access premises where the person has reason to believe books relating to the affairs of an approved auditor or the conduct of an audit of an SMSF are kept. The authorised person may inspect any book found on the premises that relates to those affairs or the conduct of that audit or that the authorised person believes, on reasonable grounds to relate to those affairs and make copies of, or take extracts from any such books. [Schedule 2, items 50 to 52, section 256]

2.152 Schedule 2 makes a series of amendments to certain provisions contained in Divisions 4 to 8 of Part 25. These amendments are intended to be applied by ASIC as Regulator in relation to approved SMSF auditors and the audits of SMSFs in the same way they currently apply in relation to superannuation entities. [Schedule 2, items 53 to 67, Divisions 4 to 8]

Reviewable decisions

2.153 To ensure a person affected by reviewable decisions inserted by Schedule 2 may request ASIC to reconsider the decision, Schedule 2 amends subsection 344(12). A reviewable decision of the Regulator includes:

•

the refusal under subsection 128B of an application made under section 128A;

•

the decision to impose or vary conditions, or additional conditions, on a person's registration under subsection 128D;

•

refusal of an application to vary or revoke conditions, or additional conditions, on a person's registration under subsection 128D;

•

the decision to cancel a person's registration under subsection 128E(2);

•

the decision to refuse an application to waive full or part payment of a fee under subsection 128L(4);

•

the decision to make an order under subsection 130F(2); and

•

refusal of an application to revoke an order under section 130F(8).

[Schedule 2, item 68, subsection 344(12)]

Taxation Administration Act 1953

2.154 Schedule 2 amends the TAA1953 to enable the ATO to make a record or disclose information to ASIC if the record or disclosure is for the purpose of administering Part 16. [Schedule 2, item 69, item 6A]

2.155 The on-disclosure rules contained in the TAA 1953 will apply to ASIC's use of the information provided to it under that Act.

2.156 This amendment is intended to ensure that the ATO has the ability to share relevant information in relation to approved SMSF auditors and the conduct of SMSF audits with ASIC to enable ASIC to undertake further investigations, enforcement actions and maintain the register of approved SMSF auditors.

Application and transitional provisions

Approved auditors of SMSFs

2.157 Provisions contained in Schedule 2 to the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012 commence on 31 January 2013. A person may apply to ASIC for registration from this date. All auditors must be registered with ASIC by 1 July 2013 to audit SMSFs after this date.

2.158 To ensure existing approved auditors are able to continue to audit SMSFs while undertaking the registration process, an auditor who was an approved auditor of an SMSF immediately before 31 January 2013 will be treated as an approved SMSF auditor until the person's registration as an approved SMSF auditor takes effect or until the end of 30 June 2013 (whichever happens earlier). [Schedule 2, item 70]

2.159 The amended provisions of the SIS Act contained in Schedule 2 apply to these auditors as if they had become an approved SMSF auditor on 31 January 2013.

2.160 These auditors will not have their details entered on the Register of Approved SMSF Auditors until their registration takes effect. The requirement to provide ASIC with an annual statement or to notify ASIC of certain matters does not commence until their registration takes effect.

Applications before 1 July 2013 for registration as an approved SMSF auditor

2.161 On 23 June 2012, the Minister announced transitional arrangements for existing approved auditors of SMSFs. Auditors who were approved auditors immediately before 31 January 2013 will be exempt from meeting certain requirements in paragraph 128B(1)(a). These exceptions will only apply to auditors who apply for registration as an approved SMSF auditor before 1 July 2013.

2.162 The regulations will therefore prescribe circumstances in which a person may be taken to have met one or more of the requirements in paragraph 128B(1)(a). The regulations will detail the exceptions announced by the Minister. [Schedule 2, item 71, subsection (1)]

2.163 This item does not prevent ASIC from applying its discretion under subsection 128(2). [Schedule 2, item 71, subsection (2)]

Approved auditors of superannuation entities that are not SMSFs

2.164 An amendment made by Schedule 2 does not affect the continuity of any regulations made for the purposes of the definition of approved auditor in subsection 10(1) that are in force immediately before 31 January 2013. However, this does not apply to the extent that those regulations apply to an auditor of an SMSF. [Schedule 2, item 72]

Auditors previously disqualified under section 131

2.165 If immediately before 31 January 2013, the Commissioner made an order under section 131 disqualifying a person from being an approved auditor, then from 31 January 2013, that person is taken to be a person for whom an order disqualifying a person from being an approved SMSF auditor is in force under section 130F. [Schedule 2, item 73, subsection (1)]

2.166 This amendment is intended to ensure that an auditor that has been disqualified as an approved auditor under section 131 is still treated as a disqualified auditor. Such persons are excluded from the definition of an approved SMSF auditor. Additionally, ASIC must refuse an application for registration as an approved SMSF auditor from such persons.

2.167 If before 31 January 2013, an application was made, as mentioned in subsection 131(6), for the revocation of the section 131 order and a decision on the application was not made before that day by the Commissioner, then from 31 January 2013, an application is taken to have been made, as mentioned in subsection 130F(9), for the revocation of a section 130F order. [Schedule 2, item 73, subsection (2)]

2.168 If before 31 January 2013, a request was made, under subsection 344(1), for reconsideration of a decision refusing to revoke the section 131 order and a decision on the request was not made before that day by the Commissioner, then from 31 January 2013 a request is taken, for the purposes of the SIS Act to have been made, under subsection 344(1) for reconsideration of a decision refusing to revoke a section 130F order. [Schedule 2, item 73, subsection (3)]

2.169 If before 31 January 2013, an application was made, under subsection 344(8) for review of a decision under subsection 344(4) relating to the section 131 order anda decision on the application was not made before that day, then from 31 January 2013 an application is takento have been made, under subsection 344(8) for review of a corresponding decision relating to a section 130F order. [Schedule 2, item 73, subsection (4)]

Enforcement of undertakings

2.170 If before 31 January 2013, the Commissioner accepted an undertaking, under subsection 262A(1) of the SIS Act, given by an approved auditor and the undertaking was still in force immediately before that day, then from 31 January 2013 the undertaking is taken to have been accepted by ASIC under that subsection of that Act. [Schedule 2, item 74]

2.171 This amendment is intended to ensure that enforceable undertakings accepted by the Commissioner from approved auditors remain in force after 31 January 2013. ASIC will become the Regulator for the purpose of the undertaking. Auditors may then apply to ASIC to withdraw or vary the undertaking. Additionally, ASIC will have the ability to apply to the Court for an order if ASIC considers the auditor who has given the undertaking has breached its terms.

Inspectors

2.172 If a person was an inspector immediately before 31 January 2013, the person's appointment as an inspector continues after that day as if it were an appointment for the purposes of the conduct of investigations, under Division 4 of Part 25as amended by Schedule 2, in relation to the affairs of superannuation entities and approved SMSF auditors andthe conduct of audits of SMSFs. [Schedule 2, item 75]

Regulations

2.173 The Governor General may make regulations prescribing matters required or permitted by Part 16 to be prescribed or necessary or convenient to be prescribed for carrying out or giving effect to this Part. [Schedule 2, item 76]

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

Approved SMSF auditors

2.174 Schedule 2is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011 .

Overview

2.175 Schedule 2 introduces a registration regime for auditors of self-managed superannuation funds. As part of this, auditors will be required to meet initial and ongoing requirements relating to their qualification, competency and independence.

Human rights implications

2.176 Schedule 2 does not engage any of the applicable rights or freedoms.

Conclusion

2.177 Schedule 2 is compatible with human rights as it does not raise any human rights issues.

Minister for Superannuation, the Hon Bill Shorten