Critical new ATO webpage — ALL SMSF auditors must pay close attention

Should an approved SMSF auditor be conducting a title search for each title for each year?

A new page on the ATO website provides an ATO view that might shock many approved SMSF auditors.

However, this view does not shock DBA Lawyers. DBA Lawyers has been aware of it for some time. DBA Lawyers has significant practical experience assisting many different approved SMSF auditors being audited by the ATO.

DBA Lawyers recently launched a new fixed-fee service where DBA Lawyers replicates an ATO audit of an approved SMSF auditor. DBA Lawyers apply a 50+ point checklist and provide written feedback to the approved SMSF auditor. This is designed so that when/if the ATO audit that approved SMSF auditor, the auditor’s files satisfy the ATO.

As a special introductory offer, if you engage DBA Lawyers by 15 September 2023, the fee for this service is $2,200+GST. After that, the fee increases significantly. To engage DBA Lawyers, email Bryce Figot of DBA Lawyers ([email protected]).

Background

The ATO have a compliance programme of auditing approved SMSF auditors. If the ATO is satisfied with what they see, the ATO may close their file. However, if the ATO is not satisfied, the ATO may refer the approved SMSF auditor to ASIC. ASIC then have various options open to them, including disqualification. For this, and many additional reasons, approved SMSF auditors should aim to maintain audit files that quickly satisfy any ATO audit.

DBA Lawyers has significant experience advising and representing approved SMSF auditors who are being audited by the ATO or who have been referred to ASIC.

ATO’s approach to charges

For a number of years, the ATO has maintained a page on their website (QC 45566). The exact wording has changed over time, but at all times the gist has essentially been:

The auditor should obtain evidence that trustees have not given a charge over or in relation to a fund asset by seeking written confirmation from trustees and by carrying out the following checks:

* property title search to check for encumbrances on real property

* the Personal Property Securities Register for other parties registering interests against other SMSF assets.

The above does not talk about the need to do this annually. More specifically, it does not expressly say that an approved SMSF auditor should conduct title searches for each title annually.

What has changed?

In August 2023 the ATO launched a new web page dedicated to just looking at how auditors should check charges (QC 73156).

The ATO website states:

You should obtain evidence ANNUALLY that trustees have not given a charge over or in relation to a fund asset by seeking written confirmation from trustees and by reviewing the:

* property title to check for encumbrances on real property

* Personal Property Securities Register to check for other parties registering interests against other SMSF assets. [Emphasis added]

Naturally, the ATO’s opinion is not the law. However, the ATO decides whether to refer an approved SMSF auditor to ASIC. Accordingly, the ATO’s opinion is very important.

Therefore, there is merit in an approved SMSF auditor conducting a title search for each title ANNUALLY.
The above is merely a simple heuristic. DBA Lawyers can image scenarios where an approved SMSF auditor properly fulfils their duties but does not follow the above.

How DBA Lawyers can help

As mentioned above, DBA Lawyers has recently launched a new fixed-fee service where DBA Lawyers replicates an ATO audit of an approved SMSF auditor. DBA Lawyers apply a 50+ point checklist and provide written feedback to the approved SMSF auditor. This is designed so that when/if the ATO audit that approved SMSF auditor, the auditor’s files satisfy the ATO. As a special introductory offer, if you engage DBA Lawyers by 15 September 2023, the fee for this service is $2,200+GST. After that, the fee increases significantly. To engage DBA Lawyers, email Bryce Figot of DBA Lawyers ([email protected]).

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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

1 September 2023