File one: the fund that started with a phone call
A new client, Dale, tells you a “super specialist” rang him, promised a high return and helped him open a fund, a bank account and an account at a platform. Dale gave his driver licence and tax file number on the phone. He has no email from the specialist, only a text from a number that no longer works.
ASIC’s alert describes cold calls and emails, promised high returns, look-alike company names and the use of the victim’s identification documents to set up the fund. Dale’s story fits.
The right move: stop, tell Dale to ring the ATO on 1800 467 033 and his previous super fund, help him write down dates and names, and talk to your firm’s principal before doing anything else on the audit.
Remember
- Cold call, return promise, ID handed over: this matches the pattern.
- Dale should phone the ATO and his old fund today.
- Escalate within your firm before continuing.
Facts and sources for this part
- ASIC’s scam alert says people are cold called or emailed and asked to transfer funds from an existing super account to a new SMSF, and the balances are instead sent to bank accounts controlled by scammers. [S9]
- Investors in these scams are often promised high returns of 8% to 20% (or more) per annum. [S9]
- They use the identification documents the victim provided to set up the SMSF and its bank account in an account fully controlled by the scammers. [S9]
- If you think someone used your personal information to set up an SMSF under your name, phone the ATO on 1800 467 033, between 8 am and 6 pm AEST, Monday to Friday. [S7]
File two: the statement that does not match the bank feed
A trustee sends a PDF bank statement for the year-end date. The closing balance is different from the balance in the accounting software, which was fed from the bank. The PDF’s fonts look slightly different on the last page.
The ATO’s referral issues include failing to obtain sufficient appropriate audit evidence. A PDF supplied by the trustee, which disagrees with the bank’s own feed, is not sufficient or appropriate.
The right move: ask the bank (with the trustee’s permission) for a confirmation or an original statement, or log in with the trustee in the room. Do not rely on either figure until one is confirmed. Write down what you asked, what came back and what changed.
Remember
- A conflict between a PDF and the bank feed needs resolving at source.
- Ask for confirmation, not another copy of the same PDF.
- Record what you asked for and what you found.
Facts and sources for this part
- Common issues in the ATO’s referrals of auditors to ASIC are failing to obtain sufficient appropriate audit evidence, inadequate evaluation of that evidence, and inappropriate documentation to support the conclusions reached. [S14]
File three: the member who never set up a fund
During a first audit, the member, Kerry, tells you she has never seen the fund and that her email address was never hers. Her tax agent says they lodged the registration on her behalf “after being sent her ID”.
The ATO says some tax agents have been unwittingly caught up in registering fraudulent funds, and that it sends alerts when a rollover or a change of details is requested. A person who never got those alerts may have had their contact details changed.
The right move: pause the audit, ask Kerry to ring the ATO on 1800 467 033, and tell your principal. Do not contact the tax agent in a way that could tip off a criminal if the agent’s own account was taken over. Your firm decides how to approach them.
Remember
- The tax agent may be a victim too.
- Contact details that are not the member’s are a major red flag.
- Let the principal decide how to approach other professionals.
Facts and sources for this part
- The ATO describes cases where SMSFs were registered without the member’s knowledge and super was rolled into an account controlled by the fraudster. [S14]
- The ATO sends an alert when a rollover is requested, and when a change of details is requested, such as adding a new member to an SMSF or changing the SMSF bank account details. [S14]
- The ATO tells tax professionals asked to register an SMSF for a new client to verify their identity, because some tax agents were unwittingly caught up in registering fraudulent funds. [S14]
- If you think someone used your personal information to set up an SMSF under your name, phone the ATO on 1800 467 033, between 8 am and 6 pm AEST, Monday to Friday. [S7]
File four: your number on a return you did not audit
A tax agent mentions that a fund’s return quotes your SMSF auditor number. You have never heard of the fund and you hold no audit file for it.
The ATO describes SAN misuse as an approved SMSF auditor’s details being entered incorrectly, or an audit not having been undertaken, and notes that tax agents who deliberately misused an auditor number have been terminated by the TPB. A false audit report under your number would be an even bigger problem.
The right move: write down what you were told and by whom, check your records to confirm you did no audit, and tell the ATO. Ask the tax agent to review the return. Keep every email.
Remember
- An auditor number on a return without an audit is SAN misuse or a mistake.
- Confirm your records and tell the ATO.
- Keep every email and note.
Facts and sources for this part
- The ATO describes SAN misuse as an approved SMSF auditor’s details being entered incorrectly, or an audit not having been undertaken, and says the TPB has terminated tax agents who deliberately misused an auditor number. [S14]
- ASIC alleges that a banned SMSF auditor created a series of false documents, a letter and 47 SMSF audit reports, and continued to act as an SMSF auditor while knowing he was disqualified. [S10]
Check what you have learned
Three questions from the test, each explained. Tap an answer.
Question 1 of 3
What should that client do first?
Show the answer
Right answer: B, Phone the ATO on 1800 467 033 and his previous super fund. The ATO says to phone it on 1800 467 033 if someone may have set up an SMSF under your name. [S7]
Question 2 of 3
What should that member do?
Show the answer
Right answer: B, Phone the ATO on 1800 467 033 and tell her previous super fund. The ATO says to phone 1800 467 033 if you think someone used your personal information to set up an SMSF under your name. [S7]
Question 3 of 3
What is your best first step?
Show the answer
Right answer: D, Check your records to confirm you did no audit, then tell the ATO. The ATO relies on auditors reporting which audits they completed, so confirm your records and tell it. [S14]