ASIC accepted voluntary cancellation requests from nine of the SMSF auditors and imposed additional conditions on the registration of the other nine.

Reliance Auditing Services managing director Naz Randeria said this latest enforcement of independence standards might offer a glimpse of what types of arrangements ASIC will target next.

Ms Randeria noted that the APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (2018) outlined additional independence recommendations beyond the reciprocal auditing arrangements that saw 18 auditing firms disciplined last week.

“This action by ASIC is a jarring sign that auditors should now be on high alert,” said Ms Randeria.

“With fee referral threshold recommendations also included in APES 110, it’s a natural assumption that the next big focus area for ASIC will be aimed at breaches of these regulations.”

The ATO has provided auditors with the guideline of a 20 per cent maximum threshold of fees from a single referral source for audits, but it remains to be seen how this will be applied in reality as we enter the new financial year, she said.

“My view is that breaches of this threshold will likely be next in the line of fire, and it will impact many more auditors than the reciprocity standards,” she cautioned.

While a number of firms have expressed angst over this arbitrary threshold, Ms Randeria said the primary aim of auditing is to be objective.

“If the very intention of the auditing profession is to conduct an impartial assessment of a fund’s compliance with superannuation law, then why make any concessions that might compromise that?” she said.

“While the clock is ticking for firms to correct their conduct from an independence standpoint, I believe many players will find this requirement very challenging to comply. Rightfully, this shake up in the industry will lead to better outcomes for all, raising the standard of work and ultimately preserving the audit quality.”