Our SMSF Audit Approach
Who is our client?
We are engaged by and report to the trustees. All correspondence and reports will be addressed to the trustees. We bill the trustees.
How do we communicate?
However when conducting an SMSF audit at the request of the fund’s accountant we don’t contact the client direct. All communication is care of the accountant.
Are we the ‘Audit Nazi”?
Not at all. We are required to strictly enforce compliance with the law, and to report on contraventions. We are also obliged to follow strict adherence to auditing standards and to satisfy ourselves of the representation of the fund’s results and financial position. And we don’t shirk from issuing a qualified report and auditor contravention reports if breaches occur or the accounts don’t comply.
However we always discuss any issues first with the fund’s accountant and, if appropriate, with the trustee, before reports are finalised.
We make a point of maintaining some ongoing involvement in accounting and tax work so that we understand the issues faced by accountants in dealing with client affairs, and can understand the nature of the accountant/client relationship.
How do we handle contraventions?
The Auditor Contravention Report is a means of communicating to the regulator any breaches which exceed the thresholds determined by the regulator. Auditors have very little discretion in deciding when to report a contravention. The law is unambiguous for the most part, as is the procedure laid down by the regulator for determining when an auditor should report a breach. Ultimately it is for the regulator to decide what action to take, based on our report.
However whenever possible we use the opportunity to explain what led to a breach, whether it has been resolved, if not when it will be, and what actions have been taken already to rectify the breach. We always try if possible to present the situation in a favourable light – providing, of course, that the trustee is committed to making rectification.
And we follow up afterwards to ensure that the representations we make in respect of rectifying braches are in fact being implemented.
We have lodged many Auditor Contravention Reports in our history, and rarely experienced negative response from the regulator whenever there was a clear intent by the trustee to make rectification.
Our relationship with the fund’s accountant
We guarantee not to do anything to threaten the accountant/client relationship with SMSF audit clients. In fact we rarely meet or have any direct contact with an SMSF client whose audit we do on instruction from the accountant.
We will not use those client details for any marketing purposes or allow third parties to access them.
We won’t perform any other work for SMSF clients, except through the accountant, and with the accountant’s express instruction.
We won’t accept any direct engagement from clients and will notify the accountant immediately should they approach us.