This article is more than 24 months old and is now archived. This article has not been updated to reflect any changes to the law.
Self managed super fund (SMSF) audit and compliance strategies can help trustees to meet their legal responsibilities, to reduce administrative burdens and to avoid unnecessary breaches of superannuation law.
SMSF trustee(s) must know and understand their obligations to ensure their SMSFs are compliant. This article is Part 1 of a summary of those obligations.
Kate HockingSMSF trustee(s) must appoint an 'approved auditor' in each income year to perform a financial and compliance audit of the fund's operations for that year. The auditor must provide the trustee(s) with a report in the approved form.[1] The trustee(s) must provide the auditor with all the relevant documents necessary to conduct and finalise the audit within the allocated timeframe.
Remember, any audits of SMSFs undertaken for the purposes of the Superannuation Industry (Supervision) Act 1993 (SIS Act) must be conducted in accordance with the Australian Auditing Standards.
SMSF audit papers should (at the minimum) include:[2]
A financial audit must include at a minimum:[3]
An SMSF auditor must ensure that the fund has satisfied the five main areas of compliance, namely:
The trustee(s) carry out their administrative obligations.
We have prepared an auditing checklist of the Cleardocs SMSF deed against the Australian Accounting Standards Board SMSF Trust Deed Audit Planning Checklist. You can view a copy of this document here. This document is useful to review in preparation for an audit.
When an auditor discovers a compliance breach, it must:
The ATO recommends that the auditor notify the trustee(s) as soon as possible after the breach is detected so that the trustee(s) can respond to the issue before the audit is finalised.[6]
For more information, contact Maddocks on (03) 9288 0555 and ask for a member of the Maddocks Superannuation or Tax and Revenue Team.
You can read the following ClearLaw articles for more relevant information relating to general tax audits here, here, and here.
You can read earlier ClearLaw articles on a wide range of SMSF topics here.
Set up an SMSF
Update an SMSF deed
Change SMSF trustee
Set up an SMSF pension
Arrange SMSF borrowing lending docs:
Set up an SMSF corporate trustee
SMSF Death Benefit Nomination — binding or non-binding
An SMSF Death Benefit Agreement — binding and permanent
Download a checklist of the information you need to order a document package.
[1] Section 133 SIS Act. The form of audit report is available from the ATO and titled SMSF — Audit Report (NAT 7573).
[2] Self Managed Superannuation Funds Guide — Roles and responsibilities of approved auditors, ATO, available at http://www.ato.gov.au/superfunds, pg 12.
[3] Self Managed Superannuation Funds Guide — Roles and responsibilities of approved auditors, ATO, available at http://www.ato.gov.au/superfunds, pg 13.
[4] See sections 17A and 19 of the SIS Act.
[5] Exclusions apply in relation to investments in a derivative product see 13.15A SIS Reguations.
[6] Self Managed Superannuation Funds Guide — Roles and responsibilities of approved auditors, ATO, available at http://www.ato.gov.au/superfunds pg 9.
Qualifications: BCom, LLB (Hons), Monash University
Daniel is a member of Maddocks Tax and Structuring team. He has expertise advising on both direct and indirect taxes. He has represented private and publicly-listed companies, high net worth family groups and not-for-profit organisations in a broad range of tax and duty matters.
The legal information and commentary on this site is general only. Documents ordered through Cleardocs affect the user's legal rights and liabilities. To assess their suitability for the user, legal accounting and financial advice must be obtained.