Heffron managing director Meg Heffron said while the commentary from the ATO explaining its compliance approach for auditors is welcome, “there is an omission in the regulator’s response that would be well worth exploring”.

Ms Heffron said she would like to see the ATO’s position on arrangements where a specialist SMSF firm prepares the financial statements, the same firm conducts the audit, but another business is the tax agent.

“This is a really common arrangement for accounting firms that outsource their SMSF work but continue to manage the client relationship,” Ms Heffron explained in an online article.

Ms Heffron gave an example to explain this type of arrangement, with a tax agent, called XYZ Pty Ltd, and a specialist firm, called ABC Pty Ltd, who prepares the financial statements and audit also.

“In this case, the referring accountant is XYZ Pty Ltd and the firm to which they have outsourced is ABC Pty Ltd,” she said.

“Conceptually, the argument for allowing this to continue is that there is a second firm (XYZ Pty Ltd) providing expert oversight and taking ultimate responsibility for the financial statements, even though they were both prepared and audited by ABC Pty Ltd.”

She also clarified that those who hold this view don’t try to claim that ABC Pty Ltd is providing a routine or mechanical service when preparing the financial statements.

“Proponents of this structure view the involvement and ultimate sign-off of the financials by a separate tax agent as providing a genuinely independent eye that solves the problem,” she said.

However, others, including ASF Audits head of education Shelley Banton, have argued that the arrangement would still fail the new Independence Guide, she stated, due to the fact that the same firm has both prepared and audited the financial statements.

“I suspect the ATO, APESB and accounting bodies agree with Shelley. But I don’t know for sure,” Ms Heffron said.

“I would love the ATO’s guidance and in fact the Guide itself to be crystal clear on this with no room for doubt or debate.”

Ms Heffron stressed that with many in the SMSF accounting and audit industry needing to make changes to business models and service structures, it is critical that there is clarity on what’s expected as soon as possible.