THE proposed increase in registration fees for new auditors of self-managed superannuation funds (SMSF) appears to be excessive according to the Institute of Public Accountants (IPA).
“A one-off fee increase from $107 to $3,429 is exorbitant. Even more unfathomable is that an auditor exiting the sector will be hit with a deregistration fee of $899,” said IPA chief executive officer, Andrew Conway.
“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 $10.6 million 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.
“Some of the funding for the SMSF auditor registration process was also sourced by ASIC charging auditors to sit the SMSF auditor competency exam.
“Surely, the fee increases 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 the new funding model and the role of ASIC, we have a major concern over the 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.
“SMSF auditors, who are members of one of the three professional accounting bodies, such as the IPA, are already well regulated in our co-regulatory system, which requires them to maintain their professional and ethical standards.
“We are calling on the Government to reconsider the proposed fee increases which will deter new entrants from entering the market,” said Mr Conway.