Proposed changes to SMSF audit requirements
So to be clear, for the skeptics out there, CapitalQ largely no longer perform SMSF audits except in rare circumstances as special favours to certain Clients, so the reduced compliance requirement has no bearing on our work, revenue or the like, so there is no incentive for us to say this, but …
Our very honest opinion, based on years of experience advising and assisting Clients with SMSFs, is that the proposal to reduce the audit requirement from annually to once every three years IS A VERY BAD IDEA!
It substantially increases the chances of wrong doing, both deliberate but also completely innocent. And it absolutely adds to the risk that Australians retirement savings could become compromised.
The average audit costs around $500 – $800 a year, often they can be less than that. It is a small price to pay for compliance and peace of mind (both at a member and societal level). And in any event, a three year audit we are sure will still cost at least $1,500, but there is every chance it could be higher, because of the difficulties that will be faced obtaining documentation and information from three years prior! Not to mention if compliance failures have occurred during that period, there will be additional audit costs, contravention reporting costs, remedial costs, it will all add up.
In our experience, it is cheaper to service a car regularly rather than wait for it to breakdown!
And just remember, the Global Financial Crisis was a direct result of reduced compliance and regulation, and while there of course always needs to be a balance when it comes to compliance and regulation, in this particular case, this is a BAD IDEA!
Read more about the proposal here.
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