A year in review
It’s been a dynamic year for the SMSF Audit industry, and as we enter the festive season, at Cloudoffis we’ve been reflecting on the pivotal trends that have shaped the landscape throughout 2023.
Read on to see 5 trends that piqued our interest this year and our forecast for what 2024 will bring the industry.
Pricing is no longer a point of difference
Across the industry, auditors are grappling with an increasing challenge to distinguish their value proposition amidst stiff competition. Earlier in the year, we saw this lead to a heightened focus on price as the primary differentiator. However, the reliance on discounting posed a risk to profit margins, and we’ve since seen a strong trend in audit businesses approaching us who are conducting a reassessment of their current operational models to maintain their competitive edge. Leading businesses are differentiating themselves by offering more valuable services to their clients, such as easier ways to collaborate, better insights and faster turnaround times.
Technology Supporting Profitability
The industry has experienced a reduction in the number of auditors compared to 2022, influenced by natural attrition, ASIC’s stringent measures, and the impact of inflation and rising wage costs. Navigating these challenges has made it a demanding year for auditors seeking to maintain a profitable practice. These macro impacts have led to a spike in the number of auditors and accountants who are embracing forward-thinking strategies such as adopting technology to sustain profitability.
In 2023, Australians grappled with a surge in data breaches, impacting individuals and businesses nationwide. The consequences of data breaches on brand trustworthiness have been significant, leading to a rise in digital mistrust. Incidents from large institutions have prompted businesses to question the usage and protection of their clients’ data and we’re seeing a trend across the SMSF industry to pay more attention to how clients data is stored, shared and what level of access individuals within an auditing firm have to client information.
A Spotlight on Compliance
ASIC’s crackdown on compliance has reverberated through the industry, particularly after a period of no SMSF audits during the COVID-19 pandemic. Notably, ASIC cancelled 364 SMSF auditors licences in January for failure to lodge annual statements. Recent actions against firms for breaches of auditing standards, independence requirements, and registration conditions underscore the intensified regulatory scrutiny in turn, leading auditors are turning to technology for compliance support. We’re noticing an increase in the need for businesses to have a digital record at their fingertips to enable them to react quickly to audit requests and tighter ATO deadlines linked to SMSF processes.
Accountants Seeking Growth Partners
A noteworthy trend is the emergence of accountants adopting a growth mindset, actively seeking ways to expand capacity to meet increasing client demands. Given the accounting industry’s cloud-first orientation, many accountants are on the lookout for partners aligning with their current cloud-based processes and practices. We’re witnessing a shift towards stronger collaboration through technology between like-minded accountants and auditors to service the industry more effectively.
Outlook for 2024
As we approach 2024, auditors face an unprecedented requirement to safeguard their businesses against compliance risks and streamline operational processes for enhanced efficiency.
The evolving landscape demands a proactive approach to stay resilient in the face of challenges and capitalise on emerging opportunities. Luckily, with the advancement of technology aligned to a constantly changing environment, SMSF auditors who adopt technology and prioritise operational efficiencies across their workflows will be supported to deliver more audits faster, with more confidence, than ever before.