In February 2008, the Australian Professional Accounting Bodies Joint Standing Committee released the Competency Requirements for Auditors of Self-Managed Superannuation Funds.

The Requirements state that the concept of professional independence is fundamental to compliance with the principles of integrity and objectivity, which are consistent with objective and impartial judgement.

Auditors of SMSFs are required to be independent of their clients both in appearance and in fact.  Where an auditor is unable to satisfy the independence requirements in respect of an audit the audit should be declined.

Auditors need also to be mindful of independence issues arising during the conduct of the audit.  If the latter arises care needs to be taken to either implement appropriate safeguards, or ultimately resign from the engagement if no safeguards are appropriate.

The regulator of self managed superannuation funds, the ATO, places great importance on the annual audit.  As a significant part of the regulatory framework for SMSFs, it is important that the audit is performed independently of the accounts preparation.

The standard of independence applied is that contained in the Code of Ethics for Professional Accountants, Section 290 (formerly Professional Statement F1).   This is applied to all self managed fund auditors not just CA’s and CPA’s.

As a result of benchmarking, the ATO has identified that where the same firm performs both the tax return and the audit there is an increased risk of a breach not being identified or reported.  This is therefore one of the risk criteria used when selecting funds for an ATO review.   During a review the firm is required to show how it has complied with the independence standards when performing these roles.

As a best practice approach it is recommended firms consider the segregation of roles within the firm and outsource the audit function where appropriate.



Chartered Accountants Independence Guidelines