The regulator said SMSF auditors play a critical role in maintaining the integrity of the SMSF system, and the rate of referrals reflects how it is continuing to use data to ramp up its compliance actions to address auditor behaviours that put the SMSF system at risk.

In-house audit reviews were a major focus of the ATO’s compliance work during FY23–24, with 11 auditors referred to ASIC for failing to ensure that their specific arrangements complied with the independence standards as set out in APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

The ATO said it also undertook compliance work focusing on auditors who have been in reciprocal audit arrangements, haven’t undertaken any audits in the past five years, and are at risk of not holding appropriate professional indemnity insurance (PII) or having completed the required continuing professional development (CPD).

The key compliance issues identified by the ATO included auditors who breached the in-house audit independence requirements and those who failed to perform adequate checks or gather sufficient audit evidence for market valuations, existence of assets, trustee declarations, borrowings and arm’s length transactions.

ASIC maintains a banned and disqualified persons register that provides information about people who have been disqualified from auditing SMSFs.