The recent changes to SMSF auditor independence standards will likely result in tens of thousands of funds moving to different auditors in the next year or so. If you and your clients are in the position of moving to a different SMSF auditor, how can you select one who’s best for you, your clients and your business?
An experienced, well-suited auditor should enhance your overall SMSF offering, whereas a poor choice could have a significantly negative impact on your business. In short, you need to ensure that any new SMSF auditor has the capacity, skills and experience to take on your SMSF audits.
Unfortunately, there are many firms out there that want to win your business, but you need to be confident that they can take on your audits and provide a timely, expert and efficiently-run process. Insufficient staffing, training, technology and infrastructure could easily see a promise of 5- to 10-day turnaround times dragging out to 2-3 months.
With that in mind, let’s explore some key things to look for when selecting an independent SMSF auditor.
What to look for
Prior to engaging any firm, we recommend that you speak with any potential auditor(s) about your needs and ensure that the team can provide you with all of the following:
- Credibility & capacity – How long has the firm been auditing SMSFs? Can they service all of Australia? What accreditations or memberships (in addition to being an ASIC-accredited SMSF Auditor) do they have? Have you or your professional colleagues heard of the auditor? Your auditor(s) should have the experience and staff available to handle your audits. They should be large enough to comfortably take on your work, but small enough so that you still feel like a valued client.
- Quick turnaround times – All audits should be completed efficiently and swiftly without compromising on quality. This can only be achieved through excellent communication, strong and consistent systems and an agreed approach between you and the auditor about the overall process.
- Freedom from unnecessary queries – You don’t want to get bogged down in unnecessary, time-consuming questions from your auditor. These can be avoided by agreeing an overall approach on how to deal with similar issues in advance. For example, Audit your Superfund has two reviews prior to the audit partner reviewing the fund, which greatly reduces the number of queries for clients.
- Outstanding knowledge, support & communication – Your auditor must be an expert in SIS legislation and other tax and auditing laws, and you should be able to speak directly to your auditor and bounce ideas off them if and when you need to. They should work with you to make the whole process as smooth as possible, helping make you aware of what’s required so that your auditor enhances, not detracts from, your SMSF offering.
- Security and confidentiality – This should go without saying, but an auditor must have a robust, secure IT environment to ensure that any transfer of business or client information is kept confidential and safe. Ask the auditor if their IT systems are ISO-27001 certified or if they use multi-factor authentication.
- Fair fees – Make sure the fees are reasonable and allow for a proper audit. Ask what the price includes (or doesn’t), as advertised rates often don’t take account of unanticipated complexities along the way.
- Clear record-keeping – Find out if your auditor will provide a monthly summary of status of funds completed and started, as well as offer proactive education on upcoming technical changes, etc. Will they keep detailed notes relating to an audit year-to-year in the interest of recording key information, maintaining accuracy and continuity, without reinventing the wheel each year?
- Knowledge of who you will actually deal with? – Will you only be communicated with via a portal or emails? Will you have to deal with a variety of auditors and junior staff or will you be allocated a key staff person (auditor, relationship manager, etc.) who will get to know you?
All of the above needs to be considered in light of recent and upcoming changes regarding independent audits of SMSFs. We believe all of these traits are needed in order to preserve the integrity of the SMSF industry.
We’ve identified and discussed various issues we feel you should address with your auditor to ensure you partner with the auditor best-suited to your needs. As an award-winning SMSF auditor, with over 15 years’ experience auditing SMSFs, we are confident that Audit your Superfund provides you with all of the above, and more. Please contact us to find out how we can help.