• Auditor reporting requirements to trustees

    As an SMSF auditor, you are required to give the trustees an audit report on the fund’s operations for the financial year.

    You need to give the trustees the audit report within 28 days of receiving all relevant documentation, drawing attention to any financial and compliance issues identified during the audit.

    You must use the Self-managed superannuation fund independent auditor's report (NAT 11466) as it is an approved form.

    Audit report

    The audit report outlines:

    • the trustees' and the auditor's responsibilities
    • the auditing standards used to conduct the audit
    • your opinion on whether the financial report fairly represents the financial position of the fund and its operational results
    • your opinion on whether the trustees of the fund have complied with SISA and the SISR.

    Contraventions or unsatisfactory financial position

    You must provide details in the ‘qualification’ area of the audit report if, during the course of the audit, you have formed an opinion that:

    • a contravention of the super laws may have occurred, may be occurring, or may occur in relation to the SMSF
    • the financial position of the SMSF may be, or may be about to become, unsatisfactory.

    You should notify the trustees as soon as you detect a contravention, so they can respond to the issue and, if possible, rectify or have a plan in place to rectify, the issue before you finalise the audit.

    If you are still awaiting documentation from the trustee and want to complete the audit to facilitate the annual return lodgment, you must qualify the audit report to indicate this.

    When is the financial position of the fund unsatisfactory?

    If the SMSF is an accumulation fund, its financial position is unsatisfactory if, in the opinion of the auditor, either:

    • the fund's assets are inadequate to cover the aggregate benefit accounts of the fund members, or
    • the value of fund assets is inadequate to cover the value of the fund's liabilities in respect of benefits accrued to fund members.

    If the SMSF is a defined benefit fund, the test is whether the value of fund assets is inadequate to cover the value of the fund's liabilities in respect of benefits vested in the fund members. The likelihood of the value of fund assets being inadequate must be based on the reasonable expectation of an actuary on whose advice the auditor has relied in relation to the matter.

     

    Last modified: 16 Jun 2015QC 45570