Show download pdf controls
  • Issues of concern

    Issues we find when reviewing the performance of SMSF auditors include:

    • auditor independence – you should never audit an SMSF if you or a relative are members, or if you undertake another role in its administration or accounting
    • knowledge of super laws – you must be able to understand and apply the
      • Superannuation Industry (Supervision) Act 1993 (SISA)
      • Superannuation Industry (Supervision) Regulations 1994 (SISR)
    • insufficient documentation – you must maintain a record of your audit processes and keep sufficient audit evidence to support your findings and opinions
    • common areas where auditors fail to obtain sufficient evidence to support their opinion are
      • market valuations for unlisted assets
      • documents supporting a limited recourse borrowing arrangement (LRBA), including obtaining the loan agreement or bare trust deed
      • valuation evidence for collectibles including insurance
    • insufficient evaluation of the evidence obtained to show that the auditor appropriately formed an opinion on the fund’s compliance with the relevant super laws
    • unsigned documentation including the
      • trustee representation letter
      • engagement letter
      • management letter
      • financial statements (in particular)
    • failure to bring immaterial breaches to the trustee's attention in a management letter such as breaches relating to separation of assets
    • failure to report contraventions to us – you must report all contraventions that meet the reporting criteria, even if they have been rectified during the year.

    Where we find matters of concern, we will determine the appropriate action, including referral to Australian Securities & Investments Commission (ASIC).

    We will refer an SMSF auditor to ASIC if we form an opinion that the auditor either:

    • has failed to perform their duties under the SISA, or other law
    • has breached a provision of the SISA or SISR
    • is not 'fit and proper' to be an approved SMSF auditor.

    You will generally be considered by us to be 'fit and proper' if you have:

    • adequately and properly performed your duties and functions as an SMSF auditor
    • a good character and appropriate professional abilities (which include competency, diligence, knowledge and soundness of judgment)
    • not been subject to sanctions under any relevant laws (including laws dealing with responsibilities relating to the person's profession, honesty and business transactions).

    ASIC may take action against a person who is an approved SMSF auditor, including:

    • imposing a condition on an auditor’s registration
    • varying a condition on an auditor’s registration
    • accepting an enforceable undertaking
    • cancelling an auditor’s registration
    • suspending an auditor’s registration
    • disqualifying a person from being an approved SMSF auditor.

    See also:

    Last modified: 15 Jul 2020QC 45575