We continue our articles on the things you should know – or might like to know – regarding superannuation fund audits.
In this article, we look at areas the ATO is looking at in regards to superannuation fund audits.
Why are the ATO looking at auditors?
The ATO can’t audit all funds itself. To ensure the integrity of the superannuation system, the ATO relies on audits being conducted by ASIC-registered auditors – such as GNS.
The fund auditors are really agents of the ATO – and the ATO has expectations of certain things evidenced in an SMSF audit if it were to carry out a compliance review or other activity in relation to an SMSF auditor.
As auditors, we are required to undertake a financial statement audit and a compliance audit. The compliance audit covers a number of key matters that a fund must comply with. Here are our top 20:
- Is the fund a SMSF?
- Are accounting records kept for at least five years?
- Are the financial reports signed by the trustees?
- Are fund assets kept separate from personal assets?
- Is the fund maintained for providing retirement benefits to members?
- Has the fund lent money to members or relatives?
- Has the fund borrowed money? If so, is the borrowing for an allowed purpose?
- Has the fund had transactions with related parties?
- Are minutes and decisions are documented and kept on file as required?
- Are records of all trustee or director of corporate trustee changes and trustee consents retained?
- Are all trustee declarations retained as required?
- Has the fund retained all member or beneficiary reports for at least 10 years?
- Are the fund’s transactions conducted at arm’s length?
- Is any trustee or director of a corporate trustee a disqualified person?
- Does the fund comply with the rules regarding benefit payments?
- Does the fund have a compliant investment strategy considering the minimum requirements?
- Has the fund accepted, rejected or refunded contributions in accordance with the rules?
- Are all assets valued at market value?
- Have the trustees given a charge over or in relation to a fund asset or a member’s benefit?
- Have the ‘collectables and personal use assets’ rules been met?
If you would like to discuss any of these points, or any other matter in regards to superannuation audits, give us a call for a chat.
Author – Philip Ruth is a registered SMSF auditor with a vast experience in SMSF audit requirements. To learn about your audit risks, please contact Philip Ruth Auditor at GNS Group on 03 9499 7444.