BDO welcomes new Treasurer & Assistant Minister but calls for a review of changes to SMSF Audit Cycles
28 August 2018
BDO Australia’s Superannuation Partners have today written to the new Federal Treasurer, Josh Frydenberg, and Zed Seselja, Assistant Minister for Treasury and Finance, to flag the unintended consequences of the introduction of a three-year audit cycle for Self-Managed Super Funds (SMSF’s).
Shirley Schaefer, National Leader for Superannuation, together with Superannuation Partner Paul Rafton signed the letter to the new Ministers.
Commenting on the proposed changes, Paul Rafton said: “The suggestion of a three-year audit cycle for SMSF’s would be a ticking time bomb for the industry.”
“The legislation was introduced in an effort to cut red tape and bureaucracy, but our professional view is that the move from annual audits to a three-year audit cycle is fraught with danger,” Mr Rafton said.
“The two big issues with the proposed changes are:
- Three-year audit cycles could result in it taking up four and a half years until a breach is detected. At that late point in the game, where does this leave the Trustee and the Auditor? Too much can happen over a three-year period with significant risk in leaving audits for this long.
- Except for a very small number of SMSFs, there is likely to be very little red tape reduction or cost savings with a three-year cycle. In fact, we estimate that there could be a significant increase in SMSF audit costs. The auditors we’ve talked to have indicated that in order to fulfil their requirements of review three years in one review will require them to undertake even more extensive validation and verification of fund assets over the preceding two years.”
Shirley Schaefer added: “With just three days to go until consultation on these changes closes, we’re asking the new Minister and Assistant Minister to take a fresh look at the proposal and apply some common sense.”