Audit of SMSF

Auditors are eyes and ears of the ATO

Trustees pay the audit fees each year - however never get to know if an audit was really conducted on their fund and never see a "management letter" from the auditor.

Many trustees get their their accountant (who does not have a copy of the trust deed) to audit their fund who produces an invoice "for audit" along with normal accounting / tax return fees - this indicates that there are some "independance" issues regarding the audit - how can "one" audit "one's job"... this is a real problem but has a simple solution.

The solution is that trustees must appoint their own auditor.

www.smsfauditlink.com.au

This post can used by other trustees to voice their concern...

 

Manoj
My SMSF auditor was chosen by my accountant but is a separate accountancy firm. Isn't this ok?
They charged me $750 for the audit which I thought was a bit on the high side because I only have my employer's contributions plus 1 IP in the super fund.

 

Billv

I cannot comment that $750 is cheap or expensive - some Esuperfund clients will call it outrageous as they must have paid only $699 for accounting + tax + audit!!

What i was suggesting by my post was that trustees should interview and appoint auditors instead of letting the accountant choose one for you ... as there could be various threats to independance in conduting your funds audit....However, if you choose your own auditor .... you know the audit will be independant... as a trustee it is your responsibility to keep your fund complying even if you have appointed service providers.

There are 11,000 SMSF auditors and it is expected after compulsary ASIC registration from 1st July 2012 only about half will be survive the written test and will commit to strict CPD requirements... about 40% of auditors, audit 5 or less funds - about 10% audit only 1 fund and from this lot about 300 audited their own fund huh! - where they were members !!!

So if you are a "SMSF auditor", it does not mean "you know" what you are doing... most of them did not even know what the section number of SISA they were auditing and what they meant in the 2009 audit report and the ATO had to modify the 2010 audit report to help these auditors and recited these sections ..

 

thanks Manoj

 

This is unfortunately too true. ATO cost saving outsourcing has made auditors their unpaid (well paid by trustees) spies by legislation that requires potential breaches to be compulsory reported. So much for client/professional privilage.

Your concerns are largley unfounded. It is the auditor who is responsible for his independence not the trustee. If your accountant audits his own work there would be serious consequences in his or her capacity as an auditor.

Often your accounting firm will audit your SMSF but the preparing and auditing of your accounts must be completely seperate people (easier in a larger firm). This may change soon and not allow the same firm to prepare and audit regardless of size.