As part of an annual audit, approved SMSF auditors must submit auditor contravention reports (ACRs) to us for prescribed SMSF contraventions. Reports ranged from administrative contraventions to more serious contraventions, such as breaches in relation to investments in in-house assets.
Overall, the percentage of the SMSF population with ACRs remains relatively stable at approximately 2% of all SMSFs each year.
In the year ended 30 June 2014, 8,800 SMSFs had ACRs lodged containing 22,000 contraventions. From the previous year, this was an increase from the previous year of 13% in the number of SMSFs with an ACR and of 20% in the number of contraventions. To 30 June 2014, just under half of all contraventions were reported as rectified.
The most commonly reported contraventions continued to be loans or financial assistance to members (21.5%), while in-house assets and separation of assets constituted 19% and 13% respectively. In monetary terms, these two contraventions represented 29% and 25% of the reported contraventions up to 30 June 2014 respectively (see appendix 1, table 26).
The demographic of SMSFs with ACRs generally aligns with the SMSF population. Analysis shows there is no correlation between the receipt of an ACR and the SMSF asset size, income range, years since establishment, or structure.