Self-managed superannuation funds will come under increased regulation from July 1 when the Australian Taxation Office gains powers to direct trustees to fix compliance breaches and attend education courses.
The powers are part of the Federal Government's Stronger Super provisions which, also from July 1, require people auditing funds to be registered as SMSF auditors with the Australian Securities and Investments Commission.
ASIC will manage the online registration system for all registered, suspended and disqualified SMSF auditors, which will be available to the public.
Additionally, the Stronger Super provisions will require SMSF trustees to appoint a registered SMSF auditor. According to the Australian Prudential Regulation Authority, Australia's total superannuation funds asset pool is $1.508 trillion, of which $474 billion is held in SMSFs.
The increased regulation has been welcomed by Karen Small, senior associate with SMSF audit firm WPIAS, who said the external auditing process needed greater competency.
Ms Small said the trend in the use of an SMSF to hold superannuation funds was a direct result of trustees demanding greater transparency and control over their contributions.
"The need for trustees to receive professional, competent and timely advice is greater now more than ever before," she said.
"Any moves to strengthen the safeguards around the management of people's retirement nest-eggs can only be positive."
Ms Small said to register as an approved SMSF auditor an accountant must have minimum education qualifications, a minimum number of hours of practical experience, pass a competency examination, be a fit and proper person, and satisfy a number of ongoing obligations.
The ongoing obligations include continuing professional development, maintaining adequate professional indemnity insurance, compliance with auditing and assurance engagement standards, compliance with set competency standards and independence principles.
Ms Small said the requirements were impacting on accounting firms that performed fewer than 20 SMSF audits.