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13 Dec 2018 Reciprocal auditing arrangements

A major risk that relates to the performance of approved SMSF auditors is auditor independence. One area of concern is in relation to auditors who enter into reciprocal auditing arrangements.

A reciprocal arrangement arises where two auditors with their own SMSFs agree to audit each other’s funds. The threat to independence is akin to the scenario of a two partner practice in which one partner is asked to audit an SMSF where the other partner is a trustee.

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