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Frequently asked questions – SMSF Audit Exchange service

What is the “SMSF Audit Exchange” service​?

The exchange is a match-making service that will allow the ~60% of accounting firms that currently do in-house SMSF Audits to “exchange” audits in a APES 110 compliant way​

The service uses a Distributed Ledger style approach to earn credit for “outsourced” audit files and exchange those credits for independent Audit work for their firm.​

A secure conditional settlement process is used ensure that Accounting practices receive back Audit engagements equal to their commitment of work to the pool.

Who is the service open to?

The “SMSF Audit Exchange” service is open to all MyWorkpapers users​:

  • A firm must be using MyWorkpapers so that we can ensure a base level of quality in regard to processes and file preparation​
  • We want firms to be able to track the number of files allocated to the firm, queries related those files and schedule when that work will be completed​

The service is not open to firms that only either audit or admin but not both i.e. those that are not looking for an exchange.​

We do, however, have a separate “Partner Program” that is aim at matching administrators looking for an auditor to outsource to.​

All exchange service subscribers may participate in the Partner Program as well.

What does it cost?

This service is free of any additional charge to all MyWorkpapers users.​

MyWorkpapers has been approached by many clients who are unsure of how to cope with the disruption from the independence requirements included in APES 110.​

Our goal is to ensure that the MyWorkpapers user base are able to adapt to the impact of APES 110, and that together, we can continue to grow that user base.

How does it work?

  • Firms who wish to participate complete a questionnaire that includes:​
  • The number of SMSF Audits that they wish to exchange ​– e.g. if a firm does 200 audits that are a 50:50 mix of in-house and external SMSF audits then they can elect to only exchange 100 SMSF Audits​
  • The percentage of revenue that this work represents in regard total revenue for the audit division/partner​
    This is used to determine the maximum percentage (50-100%) of work that a firm can receive from any one referrer – e.g. if the firm has not external audit work then they would have a maximum of 50% from one source but in the case above they would be able to receive a 100% of that work from one source.​
  • Complexity of Funds​
  • Fee Expectations ​
  • Preferences in terms of regional/national, firms size and offshore/onshore etc.​
  • And a number of other profiling questions
  • Once profiled, Firms are periodically, every 4-6 weeks, placed in a pool with other firms:​
  • Each firm is matched twice; once as a “auditor” and once as an “administrator”​
  • Prospective matches are introduced via email and they negotiate directly around the service terms and conditions​
  • Once agreed the firms may look to exchange contracts directly, optionally, can choose to make the engagement conditional on the successful settlement of the other side of their exchange.​
  • These negotiations must occur and be completed within a “settlement” period of 4 to 6 weeks, ​
  • If firms are not successful then they can “opt out” and choose to be re-matched ​
  • Re-matching may occur during the same period if time permits or otherwise it will occur in the net matching round.​

What if I don’t like my match?

  • Once introduced firms negotiate who wish to participate complete a questionnaire that includes:​
  • The number of SMSF Audits that they wish to exchange – e.g. if a firm does 200 audits that are a 50:50 mix of in-house and external SMSF audits then they can elect to only exchange 100 SMSF Audits​
  • The percentage of revenue that this work represents in regard total revenue for the audit division/partner​
    This is used to determine the maximum percentage (50-100%) of work that a firm can receive from any one referrer – e.g. if the firm has not external audit work then they would have a maximum of 50% from one source but in the case above they would be able to receive a 100% of that work from one source.​
  • Complexity of Funds​
  • Fee Expectations ​
  • Preferences in terms of regional/national, firms size and offshore/onshore etc.​
  • And a number of other profiling questions​

What are the APES 10 Commandments of SMSF Audit?

  1. Thou shalt not do In-House Audits;
  2. Thou shalt not do In-Network Audits;
  3. Thou shalt not Swap Audits;
  4. Thou shalt not audit a Recent Employer (the two-year rule);
  5. Thou shalt not become Dependent on any client (the 50 per cent rule);
  6. Thou shalt not Audit Yourself;
  7. Thou shalt not Audit your Family;
  8. Thou shalt not Audit your Business Partner;
  9. Thou shalt not Audit your Auditor;
  10. Thou shalt not Audit a fund for 10 years+ …without external review.

How many firms are affected?

Our research indicated that 62 per cent of firms do some in-house Audits. They are ALL covered by these new rules.

What about routine and mechanical exemption?

Yes, you can do Routine and Mechanical Work and using “Chinese Walls” you can do the audit as well BUT…

The client MUST:​

  • Make all accounting policy and coding decisions​
  • Provide journals and TB for you to work from​
  • Demonstrate they have capability to do this work​

Your firm CANNOT:​

    • Manage or make any decisions on the accounting work​
    • Advise the client on financial planning, accounting or tax matters​
    • Do anything requiring professional judgement

How do I register my interest?

If your firm currently performs in-house SMSF audits (i.e. you audit funds that you also prepare the accounts for), then you use this form to register your interest and we’ll keep you informed as we progess this service.