Tips and Facts about SMSF Audits

Tips and Facts about SMSF Audits

Before you hire a SMSF audit firm, there are a number of things you must consider. The auditors must be credited to audit SMSF funds and must have the capability to audit a SMSF fund of your size. Because of this, this article highlights some facts about SMSF audits. Before contracting the auditor, it is necessary that you have the following questions answered.

Is the auditor experienced in auditing SMSF funds? Check if they have a team of satisfied and experienced CPA who are based in Brisbane.
Check if they are approved and registered with ASIC and have a license to operate as an SMSF audit firm.

Confirm if their staff undertakes regular training and that they can keep up to date with the relevant laws. Ensure that they meet the legislative requirements and comply with the legislative laws.

Do the staffs of the audit company you want to contract undertake regular training and follow the latest regulations that govern SMSF?

What is the turnaround time of the AMSF audit firm?
What costs are involved in the SMSF AUDIT?
Is the firm of your choice in a position to handle complex audits?
Can the team be trusted to complete the audit?

It is important to remember that anyone running a self-managed super fund must have its books audited years by an approved auditor.  This is why it must appoint an approved auditor to an audit aimed at establishing whether the SMSF complies with SMSF rules or not.

After the audit, the auditor must be in a position to give a financial statement and a report on whether the fund is SMSF’s compliance or not.
There are new changes that took effect from 1 July 2014.  This change must be adhered to if you want to avoid penalties. Already ATO has indicated that an SMSF trust that has is under some form of financial penalty cannot use the SMSF assets to pay for the penalty.

The role of the auditors
The fact that the law requires that the SMSF must have their account audited each year defines the scope of what the auditors are expected to do.  The law requires that the trustees must appoint an auditor who can audit the firm and ensure that it complies with the laws.  The auditor must therefore ensure that:

The SMSF funds are audited in accordance with the super law and regulations.  They must also adhere to the various code and practices guiding SMSF.

The auditor must then provide an opinion on the status of the fund including an assessment on compliance. The auditor is under an obligation to report the finding to the trustee. The report must be submitted using a form that is provided and must provide and highlight any financial compliance issues.

If there are any contraventions, the auditor must ensure that such contraventions are reported.
The auditor must also ensure that he is approved by Australian Securities investment Commission. Thus, before the trustees hire an auditor, it is important that they check and verify that they are listed on the ASICs website or not.

SMSF audit Fee
There have been a number of people who have think that the amount of money charged as a fee for the audits are high. They have also proposed that the audits fee should be free. However, it is important to analyze the task that is performed by the auditors.

The auditors are charged with the responsibility of preparing the accounts before they can conduct an SMSF audit that culminates into submission of the SMSF annual returns.  These services are bundled together and a single fee charged irrespective of whether they are an accounting or SMSF administrative service. Thus, it makes things easier for the trustees who just have to pay a single invoice.

Who is competent to audit an SMSF?
To answer this question, the following Facts about SMSF audits can be helpful.
Anyone who is satisfied and registered by ASIS and a member of any of the bodies listed below qualifies to audit an SMSF.

  • One who is member of CPA Australia Ltd
  • One who is a member of the association of taxation and management accountants
  • One who is member of the chartered accountants in Australia
  • A fellow of the National Tax and accountant association Ltd
  • Must have a company that is registered
  • One who is an auditor general of the commonwealth

Anyone who may represent themselves as an approved auditor but who is not eligible is subject to a penalty of $5500 if he is found masquerading as an SMSF auditor. It is worth noting that SMSF auditors play an important role in ensuring that all SMSF funds in Australia regulate the way SMSF funds operate. This is why it is important for any member of an SMSF trustee to read these facts about SMSF audits before they engage an auditor