The Government on Mon 15.10.2012, released exposure draft regulations setting out the proposed details for the auditor registration regime for self-managed superannuation funds (SMSFs). The draft regulations complement the approved SMSF auditor regime proposed by the Superannuation Laws Amendment (Capital Gains Tax Relief and Other Efficiency Measures) Bill 2012.
The draft regs will amend the SIS Regulations to specify the qualifications, practical experience, continuing professional development, professional indemnity requirements and auditor independence requirements for approved SMSF auditors.
- The practical experience regulation will require at least 300 hours of work in auditing SMSFs in the 3 years immediately before applying for registration with ASIC.
- An approved SMSF auditor will also need to undertake at least 120 hours of continuing professional development training every 3 years.
- Under transitional provisions until 1 July 2013, it will not be necessary to meet the practical experience requirement where the auditor has signed off on an SMSF audit in the last 12 months.
- Likewise, an auditor who has signed off on at least 20 SMSF audits in last 12 months will not be required to sit a competency exam.
- The level of professional indemnity (PI) insurance set under a limitation of liability scheme provided by a professional organisation will be deemed to be adequate.
- Otherwise, the level of PI insurance must be adequate to cover a single claim (or in aggregate) of at least $500,000 and be adequate in the opinion of ASIC.
- ASIC will also require the policy to cover the approved SMSF auditor, directors, partners and employees and contractors (if they do not have their own PI cover).
- The draft regulations specify the proposed fees for approved SMSF auditors (eg a $100 application fee for registration with ASIC).
- Additional fees are proposed for approved SMSF auditors if they do not submit their annual statement to ASIC on time.
Amendments are also proposed to require SMSF trustees to appoint an auditor within 45 days before the due date for lodgment of the SMSF annual return. The prescribed period for which an audit report in respect of an SMSF must be given will be set as 28 days after the trustee of the fund has provided all documents relevant to the preparation of the report to the auditor.
DATE OF EFFECT: The regulations are proposed to commence on 31 January 2013. The amendments to the prescribed period for audit reports will commence on 1 July 2013.
SUBMISSIONS are due by 26 October 2012.
[LTN 200, 16/10]