SMSF Auditors And Why You Need One

A Self Managed Super Fund offers a lot of benefits but it also has a number of legal requirements set out by ATO. One of the requirements is that the fund needs to be audited by a qualified auditor each year before the return is submitted to the taxation office. The legislation says that getting the audit done from an approved SMSF auditor is the responsibility of the trustee of the fund.

So, if you want to know, what is an SMSF auditor; he or she is an approved auditor that is given the responsibility of auditing the Superfund and ensure that the fund is in compliance with various laws. It is also the responsibility of the auditor to file a contravention report in case of a discrepancy.

What Is an SMSF Auditor?

As mentioned above, the laws that govern the Superfund sector require that the statements and accounts and all other compliance needs of the Superfund are to be audited by an approved auditor each year. Also, this auditor should be a third-party operating at arms length from the fund that is being audited.

Severe penalties are imposed by the ATO in case an audit is not completed. Also, if the audit is not done, the Superfund may risk losing its tax concessions and may be deemed non-compliant. The annual return for the Superfund cannot be filed until the audit has been completed by an approved auditor. The audit report is needed to completely fill the information that is required in the income tax return.

The first things that you need to do to hire the services of an auditor is to find out whether the auditor is registered with the appropriate authorities and whether he or she possesses an SAN which is also known as SMSF number. This number needs to be mentioned on the annual tax return.

It is also important that you get in touch with the auditor early to give him or her enough time to go through the various documents and ensure that the super fund is compliant with various regulations.

There was a time when Superfund trustees viewed auditors as nothing but an agent of the taxation office who have been given the responsibility to charge auditing fees each year without offering much in return. However, the professional auditors should be part of your overall strategy team.

Thanks to the advances made in the technology, the auditors these days have a lot of free time and can take a consultative approach, as far as the strategy for the Superfund is concerned. It is true that the auditors report is required by the regulatory system but auditors also educate the advisors and trustees in addition to performing the audit. One of the biggest benefits of getting a perspective from a trained auditor is that he or she can give a completely independent view of the running of the Superfund.

Hiring the Right Auditor

It won’t be wrong to say that Superfund is a complex structure and therefore, auditing these funds requires the services of a specialist. However, some of the Superfund trustees make the mistake of hiring an auditor who is not well acquainted with the various strategies and laws of compliance of Superfund.

It is important that the trustees hire an auditor who is well versed with the laws of the super funds and can also offers strategic advice to the trustees. There are specialist auditors who are always updated on various changes in this field.

Some people are of the opinion that a strategist cannot fulfil the obligation of an independent auditor. Nothing can be further from the truth. In fact, specialist auditors are most qualified to offer a fresh and independent perspective for forming a highly valuable SMSF strategy.

The auditors are also required to satisfy the following criteria to audit a Superfund.

The auditor needs to be completely independent and should not have any personal interest or association with the trustees of the Superfund.

The auditors cannot be a member or trustee of the Superfund that they are auditing.

The auditors cannot prepare the statements and accounts of the Superfund.

Also, auditors cannot be a close associate or relative of the trustees of the Superfund.

Overall, the goal here is that the auditor should be completely independent and free of any bias or personal interest. A professional auditor will assess the overall compliance of the Superfund. The auditor will also provide you an audit report that is required for preparing the annual return.

Hopefully, this answers everything you wanted to know about, what is an SMSF auditor.