Searching For An SMSF Auditor

Self-managed super funds are becoming quite a powerful economic tool. A large percentage of Australians have signed up with one or registered their own superannuate. The high number of members automatically implies increased value of finances and assets held by the sector. This necessitates for annual auditing that helps keep track of how the superannuates are using funds.

A self-managed super fund auditor plays a key role in the success of any SMSF. This article provides an insight into the dealings of auditors in the sector. The article aims at equipping the reader with some sort of guideline on the roles played by the SMSF auditors, the cost of hiring the services of one, the benefits of hiring an auditor as opposed to doing it yourself, all of these being the factors to consider while finding an SMSF auditor.

What As The Role Played By An SMSF Auditor?
As mentioned above, an SMSF auditor is a very important player in the superannuate industry. Auditing of the financial records of a self-managed super fund is a requirement that is set by the law. So, whether it is for legal purposes of for the benefit of the SMSF, an auditors role cannot be undermined.

The repercussions for failing to have an audit done at least once in a year range from small to very severe. Worst case scenarios tend to bring about adverse financial impacts on the trustees and affiliate members of the fund.

It is, therefore, the responsibility of the members of the superannuate to acquire the services of a professional SMSF auditor to perform their compliance and financial audit. The SMSF also needs to avail to the auditor all relevant documents to facilitate the audit.  A successful audit will better the performance of the SMSF by:

  • Providing the SMSF with an assessment of the funds compliance
  • The audit can be used for the basis of decision making
  • Auditing helps reveal the true picture of the SMSFs financial position which will increase the funds lending power.
  • It allows members to stay in the loop in matters relating to finances and investments.
  • Auditing is also a good tool to use in comparing the performance of superannuates. The findings can be used to rank the various SMSFs according to their performance.

What Are The Costs Of Hiring A SMSF Auditor?

This is a very important topic when talking about SMSF auditing. The question on costs will always arise when finding an SMSF auditor. Auditing is a mandatory requirement for every SMSF that is legally recognized. The costs can be somehow expensive but this will vary from one auditing company to the other. Factors that will influence the cost include:

  • The number of members in the SMSF
  • The level of complexity of the SMSF
  • The number of financial transactions performed during one financial year
  • The number of investment strategies undertaken by the SMSF
  • Affiliation of members to both pension and accumulation phases, and
  • The objectives of the superannuate

What Are The Benefits Of Acquiring The Services Of A Professional Auditing Firm?

Ideally, the person to conduct the audit should be an independent auditor who holds no interests whatsoever in the dealings of the SMSF. Audits that are conducted through this method are reliable as they are usually free from any bias. Other benefits that an SMSF may enjoy from outsourcing an auditor include:

  • An audit that is conducted by an independent party guarantees minimum regulatory risks and excellent professional performance.
  • The long-term costs of hiring the services of professional auditors are far much less than when conducting an in-house audit.
  • An independent audit offers no threats at all to good client relationships. Clients are more willing to work with a company whose audit is independently done.
  • Apart from maintaining good client relationships, independent audit reassures clients and members that the SMSF is being run with the best practices that minimise risks.
  • Hiring an external auditor also ensures that time and effort is spent in carrying out other responsibilities that are essential for the success of the SMSF.

In conclusion, an audit is deemed complete when both the financial and compliance bits are addressed. The finding of the audit are then presented to the self-managed super funds management for further analysis. It is my belief that before finding an SMSF auditor, one would greatly consider the information contained in this article.