Our compliance approach
Our compliance approach is designed to:
- support self-managed super fund (SMSF) auditors
- identify and address high-risk SMSF auditors.
Where we decide to take compliance action, we may:
- send targeted information and advice through electronic and paper mailouts
- review and audit SMSF auditors
- refer auditors to the Australian Securities & Investments Commission (ASIC).
Reviews and audits
We undertake reviews and audits of approved SMSF auditors where we:
- have information showing there are matters of concern
- want to provide assurance that an auditor is complying with their obligations.
An audit is more comprehensive than a review. For example:
- a review may investigate a single issue, such as independence
- an audit will examine all of an auditor's professional obligations.
Our reviews and audits will:
- review your audit processes and performance to identify issues
- check you are complying with your professional requirements and reporting requirements under super laws
- test whether you are correctly applying super laws
- identify areas where you need support or education.
In most cases, our initial contact will be informal. We will advise you of:
- the purpose and scope of the review or audit
- what action you need to take
- your rights.
If you are selected for an audit, we will ask for:
- copies of your audit working papers
- any other documents or evidence relevant to your assessment of the fund's compliance with super laws.
We will tell you which audit working papers, supporting evidence and other documents we require during the interview.
To help you prepare for an audit or review, see what we look for when auditing an SMSF auditor.
When an organisation is responsible for many SMSF audits, we will review and test internal controls to give us assurance that the large number of SMSF audits are undertaken satisfactorily.
At the end of a review or audit we may take one or more of the following actions:
- no further action
- provide education
- escalate to audit (reviews only)
- apply penalties
- referral to the Tax Practitioner's Board
- referral to ASIC.
We refer approved SMSF auditors to ASIC:
- if you do not respond to our request for information and documentation
- for consideration and possible enforcement action in accordance with practice statement PS LA 2018/01 Self-managed superannuation funds - referral of approved SMSF auditors to ASIC.
Referral to ASIC
We work closely with ASIC on auditor compliance. We will refer an approved SMSF auditor to ASIC if we believe that the auditor:
- has failed to perform their duties under the Superannuation Industry (Supervision) Act 1993 (SISA), or other laws
- has breached a provision of the SISA or Superannuation Industry (Supervision) Regulations 1994 (SISR)
- is not 'fit and proper' to be an approved SMSF auditor.
PS LA 2018/1 Self-managed superannuation funds - referral of approved SMSF auditors to ASIC explains in further detail how we decide whether to refer an SMSF auditor to ASIC.
ASIC may take action against a person who is an approved SMSF auditor, including:
- imposing a condition on an auditor’s registration
- varying a condition on an auditor’s registration
- accepting an enforceable undertaking
- cancelling an auditor’s registration
- suspending an auditor’s registration
- disqualifying a person from being an approved SMSF auditor.