Everything You Should Know About Appointing An SMSF Auditor
There is no denying the fact that self managed super funds or SMSFs are one of the most popular ways to invest money for long-term growth.
The SMSF industry is growing with a huge increase in the number of super funds over the years.
The trustees of super funds are required to follow the conditions set by the appropriate authorities.
In case they breach the rules of the SMSF, they can be fined by the appropriate authority and in extreme cases, they are also liable to face criminal penalties.
SMSF Audit Requirement
One of the main requirements of SMSFs is that the trustees are required to appoint an approved auditor to audit the fund each year.
They have to audit the fund before filing the annual return of the super fund.
It is also important to note here that not everyone is approved to audit a super fund. They must be registered with ASIC.
When they register with ASIC, they are given an SMSF auditor number which must be mentioned on the annual return of the super fund.
Also, they should be independent, which means they cannot audit a fund where they hold any personal financial interest.
Also, they are not allowed to have a close business or personal relationship with members or trustees of the fund.
It’s also important to mention here that a professional auditor is required to be appointed and they need to audit the fund even if no payments or contributions are made in a particular financial year.
Finding an SMSF Auditor
As far as finding an auditor is concerned, you can easily find an auditor online with the help of ASIC register.
The numbers suggest that the audit industry is consolidating as the number of SMSF auditors has come down from more than 10,000 in 2012 to less than 6,000 in 2016.
The super fund is required to pay auditing fees to the auditor. As far as the cost of audit is concerned, it depends on a number of parameters.
Some auditors base their fee on the number of key events that have occurred during an audit year whereas there are also auditors that offer SMSF auditing services at a flat fee.
They charge the same fees regardless of the number of key events in the year.
Key Happenings in an SMSF Audit
As part of the auditing process, the auditors are required to conduct financial audit as well as a compliance audit of the super fund.
As far as the financial audit is concerned, they analyse all the financial statements of the fund including the income statement, member statement as well as balance sheet and any other requirements based on Australian auditing standards.
As part of the compliance audit, the auditors are required to analyse the super funds compliance with the current superannuation legislation.
Once the audit is complete, the auditor is required to complete an independent report document provided by the ATO.
The auditor is required to submit this report to the trustees of the super fund within 28 days of receiving all the relevant documentation.
The trustees are expected to take care of any breaches as reported by the auditor.
The audited annual return of the super fund should be submitted to the ATO by the trustees and they should also ensure payment of any associated tax obligations.
It is also the responsibility of trustees of the super fund to provide all the required information to the auditor for the financial year that is being audited.
In case a specific document is sought by the SMSF auditor, the trustees are required to provide this information within 14 days.
Conclusion
Overall, it is a legal responsibility of the super fund trustees to get their super fund audited by an independent and properly registered SMSF auditor to ensure that they are always in compliance with the super legislation.
Serious penalties can be imposed by the ATO for non-compliance and therefore, it is best to do some research and hire the services of a professional and experienced auditing team in order to stay compliant with the super legislation.
If you are looking to establish a Self Managed Super Fund, or need to have your Self Managed Super Fund audited, then look no further than SMSF Pro.
SMSF Pro has years of expertise in the Self Managed Super Fund arena and is able to conduct quick and independent SMSF audits for a flat fee.
Please call us today on 1300 023 374 or message us through our website https://smsf-auditor.com.au/contact/ for all your Self Managed Super Fund requirements.
