SMSF Audit Coordination

An independent audit is a legal requirement under the Superannuation Industry (Supervision) Act 1993. Every SMSF must be audited by an approved SMSF auditor before its annual return can be lodged, regardless of the fund's size or whether it was active during the year. The audit gives the ATO assurance that the fund's financial statements are accurate and that the trustees have complied with the superannuation rules. The audit covers two limbs: a financial audit of the accounts, and a compliance audit testing specific SIS Act and regulation requirements.

Independence is a strict requirement. An approved SMSF auditor cannot audit a fund where they (or their firm) prepared the financial statements or have a relationship that threatens objectivity. Because we prepare your fund's accounts and annual return, we cannot also be the auditor — that would breach the independence standards (APES 110) the auditor must follow. So we coordinate the audit with a separate, ASIC-registered SMSF auditor. This separation protects you: the auditor reviews our work with genuinely fresh eyes.

We prepare a complete audit pack so the auditor can work efficiently: signed financial statements, the member statements, the bank and investment reconciliations, contribution and pension records, the trust deed and any amendments, the investment strategy, and supporting evidence for asset valuations. We then engage the auditor, answer their queries, locate any further documents they request, and manage the timeline so the audit is finished well before the annual return is due. You deal with us; we deal with the auditor.

Common queries include requests for market-value evidence on property or unlisted investments, confirmation that related-party transactions were on arm's-length terms, evidence that the investment strategy was reviewed during the year, clarification of contributions that may approach the caps, and confirmation that pension minimums were met. The auditor may also test the in-house asset rules and the sole-purpose test. We resolve most queries by supplying the document or reconciliation the auditor needs; where a query points to a genuine issue, we discuss the position with you before responding.

If the auditor identifies a breach of the SIS Act or regulations that meets the ATO's reporting tests, they are legally required to lodge an Auditor Contravention Report (ACR) with the ATO, independently of the trustees. Not every issue is reportable — there are specific tests covering the nature, size and timing of a contravention. Where a potential contravention exists, we work with you and the auditor on how it can be rectified and documented. Rectifying a breach early, and showing the auditor the steps taken, usually produces a far better outcome than leaving it unaddressed.

Once the accounts are finalised and the audit pack is complete, a straightforward fund is often audited within a couple of weeks, though it depends on the auditor's workload and how quickly queries can be answered. We aim to have the audit completed comfortably ahead of the annual return lodgement deadline so there is no last-minute pressure. Leaving the audit until the final days before lodgement is risky: if the auditor raises a query that needs trustee action, there may not be time to resolve it before the due date.

The trustees are. Under the SIS Act the trustees are personally responsible for the fund's compliance, and that responsibility cannot be delegated to the accountant or the auditor. Our role is to prepare accurate workpapers and coordinate the audit; the auditor's role is to form an independent opinion. If a contravention is found, the consequences (rectification directions, education directions, administrative penalties, or in serious cases loss of complying status) fall on the trustees. This is why we keep trustees informed throughout and document the decisions made.