Technology Automation vs Professional Judgement in SMSF auditing
Technology enables greater efficiency in SMSF auditing, which in turn gives time and cost savings. However, risks arise when artificial intelligence entirely replaces professional judgement by an experienced auditor.
The ATO says that reliance on technology is a concern and that rather, technology must be used in conjunction with professional insight. Auditors need to provide their skills and judgement when conducting audits, and must always remain sceptical and independent, rather than just simply trusting software.
SMSF automation can result in oversights, which in turn can be very expensive. The penalties for making a mistake are at best a fine, and at worst, being caught under a strict liability legal action for recovery of all losses, damages and legal costs.
Accountants and auditors alike need to ask “Where is this data feed coming from, how reliable is it and what systems can we set in place to ensure reliability.” A technologically prudent auditor will cross-check information and ensure the integrity of direct feeds:
- Automation of SMSF documents simply cannot replace the accuracy, decision making and advice that an auditor brings.
- Electronic feeds are not always reliable and can lead to complacency.
- Electronic signatures are risky – how do we establish that the trustee really signed the documents?
- If the client has a two-fund strategy, does the software review the compliance of the whole situation?
The challenge is not to replace professional judgement and insight with technology but rather to use technology to save time on everyday tasks and spend this time on professional insight and review.
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David Saul | Saul SMSF