SMSFs and auditors registrations – Are you ready?

From 1 July 2013:

• Any auditor who wishes to sign off on audit reports for self-managed superannuation funds (SMSFs) must be an ‘approved SMSF auditor’.
• SMSF trustees who engage an auditor who is not an ‘approved SMSF auditor’ will breach the Superannuation Industry (Superannuation) Act 1993.

An approved SMSF auditor is one registered with ASIC, which becomes responsible for monitoring approved SMSF auditors. A person or entity applies to be an approved SMSF auditor through the ASIC website using ASIC Connect from 31 January 2013. Once registered, an auditor will be issued a SAN (SMSF auditor number).

ASIC has announced that, to be registered before 1 July 2013, applications must be lodged with ASIC by 30 April 2013. From 1 July 2013 an auditor cannot audit SMSFs until registered, even with a pending unfinalised application.

ASIC will maintain a register of approved SMSF auditors and disqualified SMSF auditors.

What are the transitional arrangements for existing auditors?

If you audited SMSFs immediately before 31 January 2013 and you apply to be an approved SMSF auditor before 1 July 2013, you may be exempt from some requirements. For example:

If you have signed off on an SMSF audit in the 12 months immediately before applying

You are exempt from the practical experience requirements

If you have signed off on 20 or more SMSF audits in the 12 months before applying

You are exempt from the practical experience requirements and the requirement to pass the competency exam

If you are a registered company auditor

You are exempt from the practical experience requirements and the requirement to pass the competency exam

What are the general requirements to become an approved SMSF auditor if I am not registered by 1 July 2013?

To be registered as an approved SMSF auditor, you must satisfy ASIC that you meet the following eligibility requirements:

• the prescribed qualifications
• the prescribed practical experience
• passing a competency exam (which you must take within 12 months before you apply)
• you are a fit and proper person to be an approved SMSF auditor, and can undertake the tasks of an approved auditor
• holding adequate and appropriate professional indemnity insurance
• being an Australian resident
• no disqualifications or suspensions in force.

To satisfy the practical experience component, you must have 300 hours experience in auditing SMSFs under the direction of an approved SMSF auditor (or equivalent experience) during the three years immediately before applying.

What are the ongoing requirements to be an approved SMSF auditor?

Approved SMSF auditors must:

• undertake continuing professional development (CPD)
• comply with required standards
• hold a current policy of professional indemnity insurance
• lodge annual statements with ASIC
• notify ASIC of certain matters.

ASIC may also impose further conditions.

The CPD component requires you to complete 120 hours of CPD over each three year period, including 30 hours on superannuation and at least eight hours on auditing SMSFs. You must keep a written record of your activities for at least 3 years.

As an approved SMSF auditor, you must also notify ASIC within 21 days if you:

• cease to practise as an approved SMSF auditor;
• are no longer an Australian resident; or
• change your details that are on the register.

Where can I get further information?

Further information regarding these requirements (including the detail of what satisfies the eligibility requirements) can be found on the ASIC website and in particular, the ASIC Regulatory Guide 243.

In our experience, the key to a successful application is to answer the questions fully and to supply all of the supporting material when you lodge your application.

Please click here to view the Regulatory Guide.

For more information or assistance, please contact Scott, Clinton or Alex, our SMSF specialist advisorsTM.