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  • 2020 SMSF annual return – Part A qualification changes

    During the 2019 income year, the SMSF annual return (SAR) included the requirement to report a Part A qualification in the SMSF independent audit report (IAR) and whether the reported issue had been rectified.

    While Part A qualifications will continue to be reportable in the 2020 SAR, the instructions will make it clear that Part A qualifications resulting from insufficient audit evidence in relation to opening balances are not required to be reported.

    The requirement to report whether a Part A qualification has been rectified or not has also been removed from the 2020 SAR with this reporting requirement now only applying to Part B qualifications.

    Part B of the IAR gives the auditor’s opinion on the fund’s compliance with super laws and Part A of the report gives the auditor’s opinion on whether the fund’s financial statements are fairly presented (ie there are no material misstatements).

    We select SMSFs for an audit or review based on a number of different risk factors including whether an auditor contravention report has been lodged for the fund. We would not generally select a fund for an audit or review based solely on a Part A qualification. However, if a fund with a Part A qualification was selected for an audit or review we would investigate the issue further.

    If you receive a qualified audit report from your SMSF auditor, you should work to rectify any issues as soon as possible. You can also make a voluntary disclosure to us. If we do commence an audit, we will take your disclosure into account in determining any enforcement action and the appropriate level of remission of administrative penalties.

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      Last modified: 25 Mar 2020QC 61928