16 April 2017

The Government’s announcement that further consultation into ASIC’s future funding model will take place has been welcomed by the Institute of Public Accountants (IPA). 

“The IPA argued strongly that the originally proposed one-off fee increase from $107 to $3,429 for new auditors of SMSFs was exorbitant,” said IPA chief executive officer, Andrew Conway. 

“While the new proposed fee has been reduced to $1,927 is a step in the right direction, it is still far too high and will only deter new entrants into the SMSF auditor market.

“Keep in mind, the ATO currently already collects $259 from each SMSF to finance the SMSF monitoring role the ATO conducts on behalf of ASIC.

“This levy was a mere $45 in 2008 but now equates to approximately $142.5M (550,000 SMSFs multiplied by $259) to monitor the sector including SMSF auditors.

“In 2011/12, the Government provided ASIC with $10.7M over five years, to develop and maintain an online registration system for auditors of SMSFs.  ASIC also developed a competency exam for auditors, enabling ASIC to deregister non-compliant auditors.

“The Government also gave the ATO $10.6M over five years to police registered auditors, check their compliance with competency standards set by ASIC and where necessary, refer non-compliant auditors to ASIC for appropriate punishment.

“Surely, any fee increase under the proposed fees-for-service funding model must take into account the money already being collected via the ATO supervisory levy.

“While we understand the objectives of a new funding model and the role of ASIC, we have a major concern over any impact these fees will have on competition, especially when there has already been a decline in the number of SMSF auditors in a market which is being dominated by the major players.

“We simply ask, what is the justification of these fee increases?

“We look forward to the next round of consultation to get ASIC funding and resourcing right,” said Mr Conway.