As a lawyer, I do a lot of work advising and representing approved SMSF auditors who are being audited/reviewed by the ATO and/or who have been referred to ASIC.
Accordingly, I’m often very interested in the ‘business’ of being an approved SMSF auditor.
Earlier this month, the ATO released data regarding titled ‘Self-managed super funds: A statistical overview 2022–23’.
Remember that for many years now, SMSF annual returns have asked for the ‘SMSF auditor fee’ as separate items. See items H1 and H2 of the return form.
Accordingly, the ATO would have excellent data on how much auditors are charging for an audit.
The relevant extract regarding audit fees is as follows:
| Average and median SMSF auditor fees | |||||||
| SMSF auditor fees | 2022-23 | 2021-22 | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| Average auditor fees | $641 | $645 | $662 | $674 | $687 | $685 | $689 |
| Median auditor fees | $550 | $550 | $550 | $550 | $550 | $550 | $550 |
| Distribution (%) of SMSFs by audit fee range, by financial year | |||||||
| Audit fee range | 2022-23 | 2021-22 | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| >$0 to $499 | 39.40% | 41.70% | 40.10% | 38.30% | 37.90% | 38.40% | 37.60% |
| $500 to $999 | 50.20% | 48.10% | 48.40% | 49.90% | 49.50% | 49.50% | 49.90% |
| $1,000 to $1,999 | 9.10% | 8.80% | 9.80% | 10.00% | 10.50% | 9.90% | 10.30% |
| $2,000 and above | 1.30% | 1.40% | 1.70% | 1.90% | 2.20% | 2.20% | 2.30% |
| Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
I am intrigued by how consistent the typical SMSF audit fees have remained over the years. My understanding is that the ‘median’ is often the best representation of ‘typical’ when large outliers might otherwise skew data. I note that the median has very consistently been $550 for as far back as the data go.
I also found the following data interesting.
| Number of SMSF auditors performing audits, by financial year | |||||||
| Number of auditors | 2022-23 | 2021-22 | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| Total | 3,166 | 3,563 | 4,101 | 4,751 | 5,143 | 5,445 | 5,764 |
| Note: The year columns refer to the financial year being audited, not the year the audit took place. | |||||||
| Distribution (%) of SMSF auditors by the number of audits they completed, by financial year | |||||||
| Number of audits | 2022-23 | 2021-22 | 2020-21 | 2019-20 | 2018-19 | 2017-18 | 2016-17 |
| <5 funds | 22.1% | 21.8% | 24.3% | 16.6% | 14.8% | 14.3% | 13.8% |
| 5 – 50 funds | 41.9% | 40.9% | 41.1% | 45.4% | 46.0% | 47.1% | 47.9% |
| 51 – 250 funds | 25.5% | 26.3% | 25.2% | 29.3% | 31.1% | 31.2% | 31.4% |
| >250 funds | 10.5% | 11.0% | 9.5% | 8.6% | 8.1% | 7.4% | 6.9% |
| Total | 100% | 100% | 100% | 100% | 100% | 100% | 100% |
It is clear that the number of approved SMSF auditors performing audits is dropping significantly each year. This is not surprising. As the ‘SMSF Auditors Professional Association Stakeholder Group key messages’ on 10 December 2024 state (https://www.ato.gov.au/about-ato/consultation/in-detail/stakeholder-relationship-groups-key-messages/smsf-auditors-professional-association-stakeholder-group/smsf-auditors-professional-association-stakeholder-group-key-messages-10-december-2024):
The ATO tabled its SMSF auditor compliance and engagement report for the period 1 July 2024 to 30 November 2024. The report identified: … A notable rate of voluntary registration cancellations by auditors after the commencement of ATO compliance action.
However, I was surprised to see an increase in the number of approved SMSF auditors who perform fewer than 5 SMSF audits per annum.
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This article is for general information only and should not be relied upon without first seeking advice from an appropriately qualified professional. The above does not constitute financial product advice. Financial product advice can only be obtained from a licenced financial adviser under the Corporations Act 2001 (Cth).
Note: DBA Lawyers presents monthly online SMSF training. For more details or to register, visit www.dbanetwork.com.au or call 03 9092 9400.
For more information regarding how DBA Lawyers can assist in your SMSF practice, visit www.dbalawyers.com.au.
By Bryce Figot ([email protected]) Special Counsel, DBA Lawyers
DBA LAWYERS
24 February 2024
