The Australian Securities & Investments Commission (ASIC) works closely with the ATO as co-regulators of self-managed superannuation fund (SMSF) auditors.
Approved SMSF auditors are registered with ASIC under the Superannuation Industry (Supervision) Act 1993 (SIS Act). Under the SIS Act, ASIC has the power to disqualify or suspend a person from being an approved SMSF auditor, or to impose conditions on an SMSF auditor’s registration.
ASIC has acted against eight SMSF auditors during the period 1 March to 30 June 2022. Seven auditors were referred to ASIC by the ATO, while the remaining auditor was identified by ASIC.
This article explores the actions of ASIC against these auditors, five of which were deregistered and three of which had additional conditions imposed on their registrations.
Deregistration of SMSF auditors
ASIC’s deregistration of five SMSF auditors resulted from breaches of obligations including auditing and assurance standards, independence requirements, and registration conditions, or because ASIC felt an individual was not a fit and proper person to remain registered.
| Disqualified auditor | Reason for disqualification |
| Auditor 1 | Not meeting the following additional conditions imposed on his registration:
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| Auditor 2 | Not being a fit and proper person because he did not provide audit files as requested and otherwise acted inappropriately in relation to the ATO’s attempts to review his audit work. |
| Auditor 3 |
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| Auditor 4 |
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| Auditor 5 |
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Conditions imposed on SMSF auditor registrations
The conditions imposed across three SMSF auditor registrations include to:
- Undertake a course of study on conducting SMSF audits.
- Have a certain number of audit files reviewed by an independent SMSF auditor.
- Conduct a review to ensure compliance with independence requirements.
- Review SMSF audit tools and templates.
- Pass ASIC’s SMSF auditor competency exam.
- Provide notification of the additional conditions to the relevant professional accounting association.
- Not perform the audit of any SMSF where it is also a client for the preparation of accounts or financial statements.
Many of the reasons for ASIC imposing additional conditions on these auditor registrations are like those cited in the deregistration cases, such as breaching auditor independence requirements, breaching Australian auditing and assurance standards, and not obtaining sufficient appropriate audit evidence.
ASIC does not specify why some auditors had additional conditions imposed rather than being deregistered, however it is likely that the misconduct was seen as less egregious. As evidenced with the deregistration of Auditor 1, not meeting additional conditions imposed on a registration can lead to subsequent deregistration.
Is there a right of appeal?
SMSF auditors have the right to appeal decisions ASIC makes in relation to them under the SIS Act. They may request that ASIC reconsider a decision it has made against them. If the decision is confirmed or varied the SMSF auditor may apply to the Administrative Appeals Tribunal for further review of the decision.
Key takeaways
ASIC has the power to deregister SMSF auditors or to impose conditions on their registrations. Auditors need to ensure that they fulfill their obligations including meeting auditing and assurance standards, independence requirements, and registration conditions, to avoid disciplinary action from ASIC.
