Completing an SMSF Audit

 Independent Auditor

SMSF AuditWhen picking an independent SMSF auditor, it is important to keep in mind that the process should be much more than “tick and flick” and that the trustee or SMSF Accountant needs to focus on the level of complexity involved and the level of communication required with the audit firm. Some audit firms offshore all their work with no ability to discuss SMSF audit queries with trustees or firms in anything more than a superficial way.

This is important to consider as SMSF trustees all have different risk appetites. Some will be conservative and keep cash and real estate as assets. Others have a greater risk tolerance, preferring high-risk assets such as unlisted firms and speculative investments such as cryptocurrency. This variance necessitates that accounting and advising companies examine how trustees have accounted for this in their investment strategy, as well as whether they comprehend the application of the compliance framework and compliance risks related with owning such assets within an SMSF.

Some SMSF trustees may assume they fully comprehend the necessary compliance requirements for complicated assets and transactions and act unilaterally without consulting their SMSF Accountant. Unfortunately, it is simple to make errors that attract unwarranted attention from the Australian Taxation Office (ATO) and increase the likelihood of an ATO audit.

Here, the selection of an independent SMSF auditor can make a significant impact. While it may be tempting to pick an independent SMSF auditor based only on audit turnaround times or trying to save a few bucks, there are compelling reasons to prioritise communication.

No accounting firm will get value from an auditor that adopts a “tick and flick” approach and is unwilling to communicate with the firm throughout the year. The interaction between the SMSF auditor and the fund should be significantly more in-depth. Communication is an essential aspect of the procedure. In reality, it is the core of everything.

Ongoing Support

Accounting firms must have confidence in their ability to contact the auditor if they have a question during the fiscal year. From here, the facts will be verified, and the auditor will return with a stance on the subject, allowing accountants to promptly present the matter to SMSF trustees.

Consultation and collaboration are the foundations of effective communication. At Auditors Australia, our clients are aware that they may contact us by phone at any point for clarification. It makes the audit process easier for the accounting firm and provides its SMSF clients with a superior experience.

A streamlined audit entails a dependable method in conjunction with auditor cooperation and consultation. An auditor must convey to customers the information necessary from an auditing standpoint in order to guarantee a seamless audit. If a client has a compliance issue or concern, it is imperative that they speak with an auditor in advance to ensure the auditing process runs smoothly and without hiccups.

In addition, a smooth audit does not require a certain number of personnel. When an audit is consistent and of high quality, auditors may enter and exit the process at any point. This method not only eliminates key person risk in our audit process, but if an auditor is out of the office, someone else can oversee the audit with ease.

It’s all about collaborating closely with our clients to gather sufficient and suitable audit evidence. Consequently, there is a minimal likelihood that unexpected concerns would arise during the audit.

The Process

 As part of their auditing process, SMSF auditors examine an SMSF’s activities from a financial and regulatory standpoint. Based on Australian Auditing Standards, the financial audit examines all of the fund’s financial statements (balance sheet, income statement, and member statement). The compliance audit examines whether the fund complies with the Superannuation Industry (Supervision) Act 1993 (Cth).

An SMSF auditor must prepare a document called an independent auditor’s report, once these financial and compliance audits are finished. SMSF trustees should collaborate with their auditor to quickly fix any violations. Afterward, fund trustees are required by law to submit the fund’s audited yearly return to the ATO and to make sure that any related tax obligations are fully satisfied.

Auditors must use a contravention report document provided by the ATO to report any violations (contraventions) of the Superannuation Industry (Supervision) Act 1993 to the ATO within 28 days of discovering them during the compliance audit. Trustees should utilise the ATO’s early engagement and voluntary disclosure programme for SMSFs if any violations go unresolved.

Before the ATO launches its own investigation, SMSF trustees who voluntarily report any violations will have this information taken into account when the ATO later evaluates the range of penalties it may apply.

We can help!

If you have any questions about your SMSF Audit or would like to discuss further how we can assist checkout our SMSF Audit page or get in touch today on 1300 157 712.