Introduction
If you’re a trustee of an SMSF, you’ll need to know about the auditing process and make sure that it’s done correctly. This article explains what auditing is, who can perform audits and how often they should be completed.
Do I need to audit my fund?
So, first of all, if you’re a trustee of a fund then you need to audit your SMSF.
If you’re a member of an SMSF (that means you’re not just a member but also have some kind of control over the fund) then again, yes, you should have an audit.
And if your company has an SMSF that is operated by employees or members and that’s where most of their retirement savings are held, then there’s likely going to be some sort of mandatory requirement for audits too.
What is the SMSF auditor's role?
The SMSF auditor is responsible for ensuring that the fund is complying with the law. The ATO has many rules and regulations that must be followed, and they’re not too forgiving when it comes to getting these details right.
The auditor must be independent, which means they can’t be related to the trustee or an employee of their business. They also need to be registered with the ATO as well as accredited by a recognised professional organisation such as CPA Australia or CAANZ. They must also not be a member of your fund!
What are the duties of trustees?
A trustee’s role is to ensure the fund complies with all laws, regulations and trust deeds. This includes ensuring:
- The fund is operated in accordance with the superannuation laws (the Superannuation Industry (Supervision) Act 1993).
- The fund has a valid trust deed.
- All contributors have been given information about their rights under that document, including how to apply for benefits.
Who can perform an audit?
An SMSF auditor must be a qualified accountant and registered with the ATO as an SMSF auditor. This means that he or she has undergone training and passed a test on the role of an SMSF auditor. An auditor must also have experience in performing SMSF audits, especially those specific to his or her industry and sector.
Can I appoint an auditor before lodging a return?
You can appoint an auditor at any time during the financial year, including before or after lodging your SMSF annual return. You can also appoint an auditor after the due date of your SMSF annual return, and even after a final notice has been issued (see below).
If you appoint an auditor after a final notice has been issued:
- The ATO will accept the appointment if they think it is reasonable to do so.
- Your accountant must notify us within 28 days that they were appointed by you as your auditor in accordance with section 228-50 of ITAA 1997 if they were not previously appointed by us under this provision.
There is a lot you need to know about SMSF audits
An SMSF audit is an ongoing process, not a one-off exercise. It’s important that you know what you need to look out for and what the consequences of not complying with the rules can be.
Here are some tips on how to make sure your fund is up to scratch:
- Audit accounts annually. You need to do this as part of your annual financial statement and it will serve as a reminder of where you’re at with regards to the fund’s compliance requirements. If there are any issues that come up during this process, then they can be fixed before they become problems in later years (i.e., if there’s something that needs fixing now).
- Keep documentation. It is also recommended by ASIC that all documentation pertaining to the running of an SMSF be kept for seven years after closure or termination of a fund – so make sure everything is filed away neatly!
Conclusion
We hope these tips are helpful to you in understanding the process of SMSF audits. If you have any questions, please don’t hesitate to get in touch with us.
SMB Accounting is a leader in the SMSF audit industry. Their offices complete audits for accountants Australia wide with a 24 hour turnaround guaranteed and all work is performed within Australia, NO outsourcing.
If you are an accounting firm looking for highly efficient and comprehensive audit work, SMB accounting is the firm for your requirements. for those wanting to discuss how our firm can increase your productivity please contact our office.
FIXED FEE of $350 + GST for all funds <$1mil assets
FIXED FEE of $450 + GST for funds >$1mil assets
Contravention Reports fixed at $110 per contravention
Please feel free to call and discuss
E: stephen@smbaccounting.com.au
P: 1300 854 159
