ob体育

ob体育 has moved to disqualify, or suspend and/or add conditions to the registration of, a number of auditors of self-managed superannuation funds (SMSFs).

The actions arose following ob体育 concerns about failures to meet requirements including independence standards and auditing standards, failing to comply with Continuing Professional Development (CPD) requirements and otherwise not being a fit and proper person.

SMSF auditors disqualified

ob体育 disqualified the following person from being an SMSF auditor:

• Philip Shugg of Victoria 鈥� for not being a fit and proper person as he was bankrupt.

Suspension and conditions imposed on SMSF auditors

ob体育 suspended for one year and imposed conditions on the following SMSF auditor:

• Greg Marlow of the Northern Territory 鈥� for significant deficiencies in auditing the ownership and valuation of fund assets, lease agreements, whether transactions were on an arm鈥檚-length basis, and compliance with personal use and collectable asset rules. He also issued an audit report in an incorrect form, and did not obtain signed financial statements.

Conditions imposed on SMSF auditors

If an auditor breaches a condition on their registration ob体育 may disqualify or suspend their registration.

ob体育 imposed conditions on the following SMSF auditors:

• John Redenbach of New South Wales 鈥� for deficiencies in maintaining auditor independence, and deficiencies in audit work on the ownership and valuation of fund assets and whether a transaction was on an arm鈥檚-length basis.
• Lenneke Serjeant of New South Wales - for deficiencies in maintaining auditor independence, and deficiencies in audit work on the valuation of fund assets, lease and loan agreements, execution of trust deeds and reviewing the investment strategy by trustees.
• Angelo Covelli of Victoria - for deficiencies in audit work on the valuation of fund assets, limited recourse borrowing arrangements, lease agreements and rental statements.
• Darren Tappouras of New South Wales - for deficiencies in audit work on the ownership and valuation of fund assets, in-house asset requirements, limited recourse borrowing arrangements. He also did not obtain signed financial statements and did not comply with CPD requirements.

The conditions applied to each auditor are summarised below:

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The various conditions imposed across the auditors were:

• Peer reviews 鈥� Having a number of audits reviewed by an independent SMSF auditor for compliance with auditing standards.
• Independence assessments 鈥� Performing and reporting on specific independence threat assessments for all clients.
• Restricted audits 鈥� Being restricted from conducting any audits in independence threat situations regardless of any safeguards.
• Professional associations 鈥� Providing a copy of the conditions to their professional association.
• Education 鈥� Completing specific courses of study, including in ethics and audit.
• Tools and templates 鈥� Reviewing tools and templates to ensure they are up-to-date and complete.
• Exam 鈥� Sitting and passing the SMSF auditor competency exam.
• Proof of CPD - Providing proof of compliance with CPD requirements annually for three years.

Background

Information about the above-named auditors (other than Mr Shugg) was referred to ob体育 by the Australian Taxation Office (ATO) under section 128P of the Superannuation Industry (Supervision) Act 1993 (SIS Act).

From 1 July 2013, the SIS Act required all auditors of SMSFs to be registered with ob体育. This was to ensure that all SMSF auditors meet the base standards of competency and expertise.

ob体育 and the ATO work closely together as co-regulators of SMSF auditors. The ATO monitors SMSF auditor conduct and may refer matters to ob体育 for possible action such as disqualification or suspension of their registration. ob体育 may also impose conditions on an SMSF auditor.

SMSF trustees and members can check whether their auditor is registered and what conditions are on their registration by searching ob体育's SMSF auditor register. ob体育 also maintains a public register of disqualified SMSF auditors. ob体育鈥檚 registers are available via .