“With the meteoric rise [of SMSFs] comes concern from government and concern from the regulators,” Mr Nicol said.

“The significant taxation concessions as well as the seemingly endless stream of money being contributed into [SMSFs] has naturally seen the anxiety levels of the government and the regulators increase exponentially.

“The regulator’s focus has been to police the police by requiring a more rigorous audit process and a greater scrutiny of those that audit the SMSFs… in doing so, they have created a licensing regime as well as a renewal of their efforts in auditing the auditor.”

In the new regulatory environment, it is vital auditors are aware of their professional obligations, Mr Nicol said.

“The most significant professional obligation… the cornerstone of an effective audit, is to be independent,” he said.

To maintain independence, Mr Nicol emphasised that an auditor cannot audit the SMSF where a relative or a related party of the auditor is a trustee of that SMSF or has a personal relationship with the auditor.

In addition, although there have been significant technology advances in the audit space, Mr Nicol stressed this should not change an auditor’s attention to detail.

“The days of the paper audit file are long gone and electronic formats are the mainstream [but] this does not mean that the same rigorous process that was adopted in paper should not be replicated in some electronic format,” he said.