Auditor Services and Other Assistance

Auditor Independence

Section 113 of the SIS Act requires the Trustees of a self managed superannuation fund to appoint an ‘Approved Auditor’ (‘Auditor’) for each income year to audit the operations of the SMSF for that year. The Act also requires that the Auditor provides the Trustee with an audit report in the approved format. yourSMSF has identified a number of leading Auditors to participate in the yourSMSF Audit Panel. Through working with these Auditors yourSMSF has been able to lock in a fixed fee and through the significant use of technology to assist in the audit program has ensured that the Auditors on the preferred panel offer complete but cost effective service.

Where the Trustee has not requested to use their own Auditor yourSMSF will randomly appoint an Auditor from its panel. yourSMSF may opt to change the Auditor for any given fund from time to time to ensure both the quality and independence of the Audit. yourSMSF does not receive any form of commission or payment from the Auditors and the quality of their work is reviewed every two years before they are reappointed to the panel.

Who can be an Auditor

Regulation 1.04(2) of the Superannuation Industry (Supervision) Regulations 1994 (the SIS regulations) defines an ‘Approved Auditor’ of a self managed fund as:

  • A registered company auditor
  • A member of the Australian Society of Certified Practising Accountants
  • A member of The Institute of Chartered Accountants in Australia
  • A member of the National Institute of Accountants
  • A member or fellow of the Association of Taxation and Management Accountants
  • A fellow of the National Tax and Accountants Association Ltd, or the Auditor-General of the Commonwealth, a state or a territory.

Financial Audit

Auditors should comprehensively examine the accounts and the financial reports of the SMSF to enable them to form an opinion as to whether the financial report presents fairly the financial position of the fund and its operations for the income year under review.

Self managed funds are required to comply with the financial statement formats specified in section 112 of the SIS Act and regulation 8.01 of the SIS regulations. Self managed funds are not ‘reporting entities’ and have special purpose financial statements; however, they should adopt in principle Accounting Standard AAS 25 Financial reporting by superannuation plans measurement principles and disclosures. The yourSMSF reporting software complies with this requirement.

Compliance Audit

Auditors of SMSFs are also required to audit compliance with the SIS Act and the SIS regulations. They must be satisfied that the SMSF has met the following five areas of compliance:

  1. The fund meets the definition of a self managed superannuation fund and has elected to be a regulated fund (sections 17A and 19 of the SIS Act)
  2. The fund is maintained for the sole purpose of providing benefits to fund members upon their retirement, or to their dependants in the case of the member’s death before retirement
  3. The trustees have an investment strategy and comply with the investment restrictions
  4. The trustees adhere to contribution and benefit payment standards, and
  5. The trustees carry out their administrative obligations.

External Audit Support Service

As an alternative to the yourSMSF audit panel, Trustees may prefer to appoint their own Auditor. As these external Auditors have not invested in the systems to communicate with yourSMSF efficiently they may be supported by an additional (separately charged) Audit Support Service fee for yourSMSF clients. Through this service yourSMSF will assist the external Auditor to complete their audit in the most timely and cost effective manner possible.