With additional requirements and delays in work being sent to auditors, one audit firm fears there will be a “tsunami of work” hitting SMSF professionals and auditors in the weeks leading up to the SMSF lodgement deadline.
Speaking in a recent podcast, Aquila Super partner Chris Levy said that with SMSF firms taking longer than usual this financial year to send work over for SMSF audits and dealing with new requirements, including those for valuations, he is expecting the last-minute rush in the lead up to lodgement deadlines to be particularly challenging this year.
“Due to the impact of COVID last year, the amount of work coming through the pipeline this year has been lessened, especially in the first part of the year. We’ve gone back to our clients to ask what’s going on and they say ‘all this work is coming, but it’s not quite ready yet’. So, I believe there’s just a tsunami of work that will need to be done before deadline, much more than in previous years,” Mr Levy warned.
“Getting the work done before the deadline is going to be the primary focus for this year.”
With SMSF professionals also navigating new auditor relationships in some cases following the independence changes, managing new requirements around valuations and dealing with another COVID outbreak, these factors may further complicate things as the deadline grows closer, said Mr Levy.
“I’m hoping that the regulators are looking at not just the lodgement numbers, but the COVID numbers too and saying well ‘maybe we need to be a little bit flexible with all the changes that have been raised and cut the accountants a bit more slack’ like they did in the previous year,” he said.
Mr Levy said as the deadline gets closer, SMSF auditors would be under a lot of pressure to complete audits with accountants.
“As we get closer to the deadline, accountants will be putting tremendous pressure on auditors to get it done, saying ‘we need this done, we’re already late’, not because it’s the SMSF auditors fault, and the poor SMSF auditor is going to have to turn around say ‘sorry this is what the ATO requires’,” he said.
“It’s not just things like valuations either, but audit evidence and documentation, internal audit reports as well. What we used to do 10 or 15 years ago, that’s gone, you need to have very strong audit files these days. The next couple of months [are] going to be quite interesting.”