Why now and what is the ATO doing?

The ATO’s announcement and position is in response to the May 2020 release of a new version of the APESB Independence Guide.

The APESB is a peak industry body with representatives from the CA ANZ, CPA and IPA.

The new Guide reflects the latest standards that came into effect from January 2020 in APES 110 Code of Ethics for Professional Accountants (including Independence Standards).

The ATO has said that they will write to any Accounting/Audit firm that is non-compliant in 2020/2021.

It is expected that the ATO will be taking an education approach and this year but after that the ATO will move to refer Auditors to ASIC, who as the licensing body, will take action against non-compliance.

How can MyWorkpapers help?

MyWorkpapers provides a complete range of processes, workpapers and check lists for firms to manage their audit engagements in a fully compliant way.

Due to persistent client demand, MyWorkpapers is also running an APES 110 SMSF Audit Exchange service.
If your firm is impacted by the latest independence changes, find out more from our Exchange Service FAQ.

What has changed in the Independence Guidelines?

The Australian Taxation Office (ATO) is on record as having always been concerned with a number of common practices that created the potential for conflicts of interest in the process of auditing Self-Managed Super Funds (SMSFs).

The new Independence Guide, and the APES 110 Code that it is based on, now provide specific guidance on a number of these common practices, in more detail, than in the past. At a high-level, the key changes are that the following, are now, definitively non-compliant and firms should cease these practices:

  1. “In-house” Audits – even if a firm manages the work with a segregation of duties i.e. with staff reporting to different Partners, if a firm does both the accounting work and the audit of an SMSF, the Guide says there is now way for this to be done in a compliant way.
  2. “Back-scratch” Audits – the “swapping” of audits is non-compliant i.e. two firms preparing the accounts for their SMSF clients, and then each doing the audits of the other firm’s funds. This “you scratch my back, and I’ll scratch yours” type of arrangement is unavoidably compromised, and both firms are non-compliant.
  3. Many firms have an arrangement where an audit firm takes on all the audit work of an accounting firm. If these arrangements are not “arms-length”, then they can be compromised in a number of ways:
    1. “Sister” Firms – if there is joint ownership or other commercial relationships between the firms, then this arrangement is unavoidably compromised
    2. “Spin-off” Firms – if the other firm is staffed by ex-employees, who have recently i.e. less than 2 years ago, left the firm whose work is being audited, then independence is compromised. Unless the audit firm has other “clean skin” staff who can do the work this practice is non-compliant
    3. “Key-client” Risk – even if the ownership and staffing issues are addressed, if the audit firm is too reliant on the income they receive from any one accounting firm, then their audit independence is compromised. Unless the audit firm can quickly win other clients, and reduce their over reliance on the key-client, they will be non-compliant.

How can MyWorkpapers ensure complete compliance with ATO requirements and Independence Guidelines?

Tick Icon Address ATO Independence and conflict of interest concerns

Tick Icon Comply with new APES 110 Independence Standards

Tick Icon Comply with applicable auditing and assurance standards issued by the Auditing and Assurance Standards Board (AUASB)

Tick Icon Comply with ATO requirements for SMSF independent auditor reports

Tick Icon Comply with competency standards for approved SMSF auditors issued by ASIC

Tick Icon Comply with the ATO auditor independence requirements prescribed in the SISR

Complete compliance with
ATO Independence Guidelines

Our workpapers automatically apply the latest ATO standards to Self-Managed Superannuation Fund (SMSF) accounting and auditing workpapers, simplifying compliance and saving you time.

From record keeping and submission to audit and assurance, our complete set of workpapers provide compliance with ATO requirements and Independence Guidelines, no matter the size of the job.

Ensure your practice complete the SMSF financial statements and accounts in a way that will be “audit ready”:

  • Apply audit checklists in the preparation of year end accounts
  • Import the trial balance, financial statements and other reports directly from the administration platforms such as Class Super, BGL Simple Fund 360 and SuperMate
  • Complete necessary workpapers, forms and statements so that evidence of compliance is readily available for review and verification
  • Index, mark-up and reference trail balance and lead schedules to supporting documents
  • Invite the auditor to access the required files for each fund and access the data and documents they require OR export the data and documents for them to import to the audit file
  • Manage and track queries with the trustee to request missing files, documents, and data for each fund
  • Manage queries from the auditor for missing files, documents, and data

Use MyWorkpapers as an SMSF Auditor to have access to tools to streamline workflow, save time and increase compliance with ATO and ASIC requirements:

  • Capture audit checklists prepared by the admin firm in the preparation of the audit
  • Import the trial balance, financial statements and other reports directly from the administration platforms such as Class Super, BGL Simple Fund 360 and SuperMate
  • Import supporting documents and worksheets provided by the accountant/administration firm
  • Index, mark-up and reference trail balance and lead schedules to supporting documents to demonstrate that reviews and verification have taken place
  • Complete necessary workpapers, forms and statements so that evidence of review and verification is readily available for compliance reviews
  • Manage and track queries with the administration firm/Accountant to request missing files, documents, and data for each fund.
For SMSF accountants

From record keeping and submission to audit and assurance, our complete set of workpapers provide compliance with ATO requirements and Independence Guidelines, no matter the size of the job.

Ensure your practice complete the SMSF financial statements and accounts in a way that will be “audit ready”:

  • Apply audit checklists in the preparation of year end accounts
  • Import the trial balance, financial statements and other reports directly from the administration platforms such as Class Super, BGL Simple Fund 360 and SuperMate
  • Complete necessary workpapers, forms and statements so that evidence of compliance is readily available for review and verification
  • Index, mark-up and reference trail balance and lead schedules to supporting documents
  • Invite the auditor to access the required files for each fund and access the data and documents they require OR export the data and documents for them to import to the audit file
  • Manage and track queries with the trustee to request missing files, documents, and data for each fund
  • Manage queries from the auditor for missing files, documents, and data
For SMSF auditors

Use MyWorkpapers as an SMSF Auditor to have access to tools to streamline workflow, save time and increase compliance with ATO and ASIC requirements:

  • Capture audit checklists prepared by the admin firm in the preparation of the audit
  • Import the trial balance, financial statements and other reports directly from the administration platforms such as Class Super, BGL Simple Fund 360 and SuperMate
  • Import supporting documents and worksheets provided by the accountant/administration firm
  • Index, mark-up and reference trail balance and lead schedules to supporting documents to demonstrate that reviews and verification have taken place
  • Complete necessary workpapers, forms and statements so that evidence of review and verification is readily available for compliance reviews
  • Manage and track queries with the administration firm/Accountant to request missing files, documents, and data for each fund.

What are the Independence Guidelines?

The Accounting Professional & Ethical Standards Board (APESB) was formed in 2006 as an independent national standards setter with the primary objective of developing professional and ethical standards in the public interest for the members of three Professional Accounting Bodies, namely Chartered Accountants Australia and New Zealand (CA ANZ), CPA Australia (CPA) and the Institute of Public Accountants (IPA). The APESB works closely with ASIC and the ATO.

In November 2018, the APESB published APES 110 Code of Ethics for Professional Accountants (including Independence Standards) as an updated framework to cover the independence of audits, reviews and other assurance engagements.
This Code came into effect in January 2020.

In May 2020 the APESB published an Independence Guide to provide practical examples of how to address the independence and conflict of interest issues encountered by accountants and auditors conducting assurance engagements in public practice.

To meet your professional obligations and comply with other competency standards set out by the Australian Securities and Investments Commission (ASIC), you must apply these codes and standards to all accounting assurance procedures, including record keeping, statement submission and audit reports.

MyWorkpapers supports accountants and auditors undertake SMSF work by automatically applying the latest and most up to date standards and addressing conflict issues, significantly reducing non-chargeable admin and boosting productivity. Complete with handy check lists and submission portals, we’ll ensure your practice can be 100 per cent compliant with ATO, ASCI and professional Independence Guidelines.