“While we assume those auditors who haven’t yet responded didn’t detect any problems with the use of their SAN, we still encourage them to contact us to confirm this was the case,” it said.

Of the auditors who responded, 2,319 confirmed no SAN misuse. The other 420 auditors reported 1,445 instances of potential SAN misuse involving 626 tax practitioners.

The ATO said it is currently contacting these practitioners to determine whether they’ve deliberately misreported a SAN.

“So far, we’ve seen some very concerning behaviour. Some practitioners have fraudulently charged clients for audits that didn’t occur and some have even prepared false audit reports with forged auditor signatures,” it stated.

“We treat this behaviour very seriously and propose to refer these matters for criminal prosecution.”

In addition to considering prosecution, the ATO said where it identifies inappropriate use of SANs by tax practitioners, it will refer them to the Tax Practitioners Board (TPB) to determine whether the practitioner’s conduct has breached the Code of Professional Conduct of the Tax Agent Services Act 2009 (TASA).

“We referred five tax agents to the TPB last financial year for deliberate SAN misuse,” it said.

The ATO said all SMSF auditors will get another opportunity to review the list of funds that reported their SAN on SMSF annual returns for the 2018 income year as part of a further mailout scheduled to start in early September and conclude in October.

“We trust our continued mailouts will decrease the misreporting of SANs,” it said.