A self-managed super fund (SMSF) audit is an independent examination of the financial records of an SMSF. The purpose of an SMSF audit is to ensure that the fund’s financial records are accurate and that the fund is complying with all relevant laws and regulations.
All SMSFs are required to have an annual audit. This requirement is set out in the Superannuation Industry (Supervision) Act 1993 (SIS Act). The ATO has the power to disqualify trustees who fail to have their SMSF audited.
Who Can Conduct an SMSF Audit?
An SMSF audit can only be conducted by an auditor who is a member of a professional accounting body that is approved by the ATO. The ATO has a list of approved accounting bodies on its website.
The auditor must be independent of the SMSF. This means that the auditor cannot be a trustee of the fund, a related party of a trustee, or a person who has provided financial services to the fund in the past financial year.
What Does an SMSF Audit Entail?
The auditor will review the fund’s financial records and other documentation to ensure that they are accurate and complete. The auditor will also assess whether the fund is complying with all relevant laws and regulations.
The auditor will report their findings to the trustees of the SMSF. The report will state whether the fund’s financial records are accurate and whether the fund is complying with all relevant laws and regulations.
What Are the Consequences of Not Having an SMSF Audited?
If an SMSF fails to have an annual audit, the trustees of the fund may be liable to pay penalties to the ATO. The ATO may also disqualify the trustees of the fund.
In addition, if the fund is not audited, the trustees may not be able to obtain insurance cover for the fund. This means that the trustees may be personally liable for any losses that are incurred by the fund.
What Are the Benefits of Having an SMSF Audited?
There are a number of benefits to having an SMSF audited. These benefits include:
- Ensuring that the fund’s financial records are accurate. This can help to protect the trustees from personal liability in the event of a financial loss.
- Ensuring that the fund is complying with all relevant laws and regulations. This can help to protect the trustees from penalties and disqualification.
- Ensuring that the fund is managed in a sound and efficient manner. This can help to improve the returns on the fund’s investments.
- Providing peace of mind for the trustees. Knowing that the fund has been audited can give the trustees peace of mind that the fund is being managed properly.
How to Choose an SMSF Auditor?
When choosing an SMSF auditor, it is important to choose a reputable firm that has experience in auditing SMSFs. The auditor should be able to provide you with a quote for the audit and a copy of their audit report.
It is also important to ensure that the auditor is independent of the SMSF. The auditor should not be a trustee of the fund, a related party of a trustee, or a person who has provided financial services to the fund in the past financial year.
An SMSF audit is an important part of managing an SMSF. By having an annual audit, the trustees can ensure that the fund’s financial records are accurate and that the fund is complying with all relevant laws and regulations. This can help to protect the trustees from personal liability, penalties, and disqualification. It can also help to improve the returns on the fund’s investments and provide peace of mind for the trustees.
