who is a SMSF auditor?
An SMSF auditor is responsible for analysing a fund’s financial statements and assessing its compliance with superannuation law. They must report any non-compliance issues to all fund trustees and the ATO
Intended to eventually replace existing default accounts offered by super funds, MySuper is a scheme from the Australian Government where employees are offered effective, low-fee super funds as their default option. Fees on MySuper funds are often restricted to covering the cost of producing their service only, which includes administration fees and investment fees.
Industry super funds
Industry super funds were originally developed by trade unions and industry bodies to provide specific superannuation products to members of those industries. Nowadays, many of them are now open to the public, but they have retained their non-profit, member first ownership models.
Retail super funds
Retail funds are usually run by financial institutions or investment companies. Generally, anyone can join a retail fund and they often have a large number of investment options. You can either apply to join a retail fund directly, or they may be recommended by your financial adviser who may be paid for their advice by fees.
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Self Managed Superannuation Fund (SMSF) Audit
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Frequently Asked Questions
Currently, an SMSF must be audited annually, and the trustees of an SMSF must appoint an approved auditor at least 45 days before their fund’s annual return to the Australian Taxation Office (ATO) is due. It’s important to understand that an audit is required even if no contributions have been made to the fund and no benefits have been paid in a financial year.
There are a number of factors than can affect the cost of an SMSF audit, including:
- The complexity of the fund’s operations. For example, whether “key events” (see above) have occurred during an audit year.
- The number of members of the fund. SMSFs can currently have between one and four members. Another proposal from the 2018/2019 Federal Budget was to allow up to six members in an SMSF from 1 July 2019, but this legislation has not yet passed into law.
- The number and frequency of the fund’s investment transactions.
- Whether any fund members are in the retirement phase.
- The effectiveness of fund trustee record-keeping systems and processes.
- How long the fund has been operating. For example, there may be more auditing work in the fund’s first year of operation to ensure that it has been set up correctly.
SMSF auditors conduct both a financial and compliance audit of an SMSF’s operations as part of their auditing process. The financial audit analyses all of the fund’s financial statements (i.e. balance sheet, income statement and member statement) based on Australian Auditing Standards. The compliance audit analyses the fund’s compliance with all superannuation legislation.
SMSF trustees (or any professional advisers that they may have hired such as an accountant) must provide their auditor with all relevant documentation for their fund’s accounts and financial transactions for the financial year being audited. For example, all financial and bank statements for that period.
If the SMSF auditor requests any further information or documentation, trustees must provide this material within 14 days.