Practice Statement PS LA 2018/1, issued on Thurs 18.10.2018, sets out the factors that ATO staff may need to consider when forming an opinion as to whether an SMSF auditor:

  • is not a fit and proper person to be an approved SMSF auditor;
  • has contravened the SIS Act or SIS Regs in conducting an SMSF audit; or
  • has failed to perform any required duties and functions adequately and properly.

The ATO has the power to monitor an SMSF auditor’s compliance with the relevant standards and can refer a non-complying auditor to ASIC for possible enforcement action. ASIC is the registration body for approved SMSF auditors. The Practice Statement notes that because the decision to refer an auditor to ASIC is not reviewable, the decision should be fair and reasonable and be made in accordance with the ATO’s good decision-making model. This requires ATO staff to apply the principles of natural justice and to give the auditor the opportunity to provide reasons as to why details of the matter should not be referred to ASIC.

DATE OF EFFECT: 18 October 2018.

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