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  • Self-managed superannuation fund independent auditor's report (IAR)

    A new version of the Self-managed super fund independent auditor’s report (IAR) (NAT 11466-07.2021) form has now been released and must be used for all audits completed on or after 1 July 2021.

    This means the new version must be used for any audits you complete on or after this date regardless of what income year they apply to.

    The new version contains two new paragraphs which highlight the need for auditors to ensure they comply with the auditor independence requirements in APES 110 Code of Ethics for Professional Accountants (including Independence standards) (2018) – effective 1 January 2020 (the Code) when conducting annual SMSF audits.

    The changes emphasise the importance:

    • of the auditor needing to ensure their firm or network firm are not providing any non-assurance services to an audit client that are prohibited under the Code and
    • that where their firm or network firm is preparing financial statements for an audit client after 1 July 2021 that a management responsibility has not been assumed for the fund and the services provided are routine or mechanical and safeguards have been applied.

    The parts of the IAR that have been changed for the reporting period commencing 1 July 2021 are as follows:

    • Part A - a new independence clause has been included in the Basis of Opinion paragraphs and requires auditors to choose the applicable option that describes whether their firm or network firm also prepared financial statements for the fund and an acknowledgment that their firm hasn’t provided any non-assurance services to the audit client that are prohibited under the Code. 
    • Part B - a similar independence clause has been inserted under the Basis of Opinion paragraphs relating to Independence and quality control. Other modifications to Part B include a reference to the new Auditing Standard ASQM 1, Quality Management for Firms that Perform Audits or Reviews of Financial Reports and Other Financial Information, or Other Assurance or Related Services Engagements. Systems of quality management in compliance with this ASQM are required to be designed and implemented by 15 December 2022. Up until this time an auditor can continue to apply the existing ASQC1. 

    None of the sections or regulations listed at Appendix 1 of the reports requiring compliance assurance have been changed.

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    Auditor independence

    Approved SMSF auditors must comply with prescribed independence requirements as part of their professional obligations under the Superannuation Industry (Supervision) Act 1993 and Superannuation Industry (Supervision) Regulations 1994.

    These requirements are set out in APES 110 Code of Ethics for Professional Accountants (including Independence standards) (2018) – effective 1 January 2020.

    The independent auditor's report includes a specific commitment that the auditor has complied with auditor independence requirements.

    Further guidance on auditor independence and the requirements of the Code is available in our Auditor independence content. Guidance can also be found in the Joint Accounting Bodies publication – Independence Guide (5th Edition, May 2020) Guidance Statement GS 009 Auditing Self-Managed Superannuation Funds issued by the Auditing and Assurance Standards Board (AUASB).

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    Last modified: 02 Aug 2021QC 17604