This obligation requires SMSF auditors to report to the regulator where a client attempts to unduly influence, coerce or manipulate them or a member of their team conducting the audit or any attempt to interfere with the proper conduct of the audit, he explained.

If the SMSF auditor becomes aware of this kind of behaviour they are required to notify the regulator in writing within 28 days, he said.

If an auditor fails to notify the regulator, they have technically committed an offence, Mr Figot warned, the penalty for which is 50 penalty units or even 12 months in prison.

This obligation means that if an auditor notifies the client that they are going to lodge an auditor contravention report and the client becomes defensive and threatens to take certain actions against the auditor, the client has then imposed an obligation on the auditor to report them within 28 days, he explained.

“Often we’ll get engaged with auditors and we see the correspondence that people have sent and some of it’s quite threatening correspondence,” said Mr Figot.

“My guess is that every auditor at one point or another will have been threatened in one way or another, perhaps not physically threatened but they will have come under attempts to unduly influence, coerce or manipulate the auditor. I think a lot of people aren’t aware of this obligation when that happens.”