SMSF Association Submission – APESB Exposure Draft 03/21 Proposed Amendments to Fee-Related Provisions of APES 110 Code of Ethics for Professional Accountants (including independence standards)

The SMSF Association welcomes the opportunity to provide this submission in response to the Accounting Professional and Ethical Standards Board Limited (APESB) exposure draft 03/21 for the proposed amendments to the fee related provisions of APES 110.

Our submission is focused on the proposed paragraph AUST R410.14.1, which discusses auditor independence and the impact of referral fees, including the introduction of a 20% threshold. These measures will directly impact not only self managed superannuation fund (“SMSF”) auditors but also trustees and referral firms. We have therefore sought to widely consult with our members on the
proposed changes.

As part of our consultation process, we undertook several member engagement activities, including a series of member round tables, discussions with our Specialist SMSF Auditor Discussion Group and direct member consultation and feedback. Feedback from members on what would be considered an appropriate threshold has been varied. SMSF audits are conducted by ASIC registered SMSF auditors in a variety of firm types, structures, and sizes. Therefore, the impacts of a particular threshold will be varied.

We do have concerns that the introduction of a threshold will become a dominant focus, may cause unintended consequences, will negatively impact start-up businesses and risks becoming a barrier to entry.