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I have received SMSF audit for two funds from an accounting firm. The audits are outstanding for FY2023 and FY2022 for both funds. The engagement letters were signed by the Trustees last month. Despite repetitive emails and follow-ups, I have not received the documentation necessary to complete the audits. Should I lodge the ACR before withdrawing from the engagement?
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Hi Umesh
Yes you could lodge an ACR re section 35C(2) of SIS that requires per the audit report that:
"The trustees must provide the auditor with the necessary documents to complete the audit in
a timely and professional manner; and within 14 days of a written request from the auditor."
I note the ATO covers reporting of contraventions where an audit engagement is terminated in their auditor contravention report guidelines. Their guidelines state:
"Where you identify a contravention while undertaking an audit, but the engagement is terminated before the audit is finalised, you still have an obligation to report a contravention to both the trustee and to us if it meets the reporting criteria.
Reporting obligations exist from the time you are appointed by the SMSF trustees to undertake the annual audit of the fund’s operations. They do not cease because an audit engagement is terminated early. This applies provided your opinion is formed during, or in connection with, performing your audit functions and regardless of whether the engagement is terminated by the trustees or the auditor.
When lodging the ACR you may also want to provide any additional concerns in Section G of the form. For example, if your services have been terminated because you identified a reportable contravention."
Thanks
The Auditors Insitute