How We Do SMSF Audits
What is involved?
The audit is in two parts – (a) financial; and (b) compliance.
The regulator is chiefly interested in the fund’s compliance with superannuation legislation; but the financial report of the fund is subject to mandatory accounting standards and must be audited according to rigid auditing standards.
We treat the financial audit with the same degree of seriousness we would apply to any other financial audit. That involves verifying ownership, existence and valuation of assets and liabilities; the fund’s earnings; and ensuring the results and financial position are reported in accordance with accounting standards.
What is the process?
We provide an audit kit comprising a checklist of required documents, records and information, together with the necessary engagement letter, trustee representation and authorities for confirmations.
We begin with the financial report and accounting records; and documents to support transactions and balances. We also request a draft annual return.
We prefer to work at our own office and will arrange for documents to be collected or posted, or preferably transmitted by email and electronic downloads – e.g. for bank transactions. Special arrangements may be made for onsite work
We communicate with the fund’s accountants by phone or email.
We maintain a complete audit file which is subject to review by the regulator. We archive these files when the audit is completed.
How long does it take?
We aim to turn around audits within a week. Should delays in obtaining information requested or asset verification cause this period to extend we keep the fund’s accountant informed.
What does the trustee get?
We provide a completed audit report. We also provide a management letter detailing not just audit findings but any other comments we consider would be helpful to the trustee. All fund documentation is returned.
Are original documents required?
Most documents can be scans, or copies, and some we can obtain direct from external sources. However some documents evidencing significant balances may need to be originals if we are unable to obtain independent verification.
Do we need the fund’s trust deed?
Yes. The regulator insists that auditors examine the trust deed to ensure that the fund meets the Sole Purpose test. We must keep a copy on file. We also need to ascertain if there have been any amendments to the trust deed between year ends.
Do assets need to be verified?
Yes, for some … we need to obtain independent evidence of existence, ownership and valuation of significant balances. This may include bank balances and property titles.