27/09/2011 11:23:53 PM
Liz Westover -
Although uncertainty still surrounds the processes for the registration of SMSF Auditors, the recent government announcement has highlighted a positive outcome for the accounting and audit industries around SMSF auditor independence.
The Institute has been advocating for some time that appropriate standards for audit independence already exist in APES 110, the Code of Ethics for accountants developed by the Accounting Professional and Ethical Standards Board (APESB). APES 110 uses a principles-based approach that allows an auditor to exercise their professional judgement in determining their own independence, an assessment which only the individual auditor can truly make. The government has supported our view that APES 110 is the most effective model for independence.
APES 110 already applies to members of the three professional accounting bodies who currently undertake approximately 95% of all SMSF audits and these same standards will now be applied across the board for all SMSF auditors.
The Cooper Review had previously suggested that prescriptive standards, including mandatory outsourcing of SMSF audit activities, was required to ensure independence. We made it very clear that these kind of measures would not necessarily achieve that outcome. A ‘tick the box mentality’ by auditors is not the right way to assess independence and runs the very real risk that individual circumstances of a potential audit engagement may be ignored.
Independence is a critical component of all audit engagements. The same principles of independence are just as applicable to an SMSF audit as they would be for the audit of a listed company. Therefore, the same principles that apply for the broader audit industry should apply to the SMSF industry as well.
The APESB has been approached to provide further guidance to SMSF auditors to assist them in their important role in the SMSF industry. The Institute will do its part also to assist members. We are just about to release the updated version of the Audit Guide for self-managed superannuation funds and the three professional accounting bodies are currently updating their independence guide.
With all the uncertainty around SMSF auditors and a potential registration process, it’s good to see the government make a logical, sensible decision on independence requirements.
Liz Westover (Member since: 12/05/2011 2:37:37 AM)
As Head of Superannuation at the Institute of Chartered Accountants, my responsibilities extend to all aspects of the superannuation industry, including self-managed superannuation funds (SMSFs). In addition to providing technical support to members working with SMSFs, I am the Institute’s spokesperson on superannuation matters and contribute to the Institute's influence in the superannuation sphere.
As a representative of the Institute, I am a member of various consultative committees with the Australian Taxation Office.
I am a Chartered Accountant with a Masters of Legal Studies, RG146 qualifications and extensive experience in superannuation. My previous roles have involved consulting on superannuation matters to employers, companies, individuals and corporate super fund trustees as well as consulting and accounting/tax compliance for SMSFs.
Consulting on all aspects of superannuation; SMSF administration and compliance
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