Hobbit - a common misunderstanding
The National Aviation Authority must always have regulatory oversight, that is why they are called regulators.
SMS is one method of requiring certificate holders to carry out their own safety, risk and quality management.
The regulator then turns up to check for regulatory compliance and that your SMS is working.
If they have a finding - that is a double whammy
a. you are out of compliance
b. your SMS is ineffective
All you have to do is fix it!