Importance of SMSF Audit

For SMSF (Self Managed Super Fund) trustees, an annual audit is mandatory, and it must be conducted by an auditor who is registered with ASIC (Australian Securities and Investment Commission). This auditor must be independent means they should not have any financial interest in the SMSF or any business or personal relationships with trusties or fund members. During an SMSF audit, an auditor is responsible for analyzing funds and financial statements and accessing its compliance with superannuation law. They must report any compliance issues to the trustees and the ATO.

How often does SMSF need to be audited?  

Currently, an SMSF must be audited annually, and the trustees must appoint an auditor at least 45 days before their funds' annual return to the ATO (Australian Taxation Office) is due. It is important to note that SMSF compliance is necessary even if no benefits have been paid in a financial year or no contribution has been made to the funds. 

Proposed Three-Year Audit Cycle:

In the 2018-19 budget, the government proposed that from July 2019, the annual SMSF audit requirement will be changed to once every three years for SMSFs with a history of good SMSF compliance and record keeping. Under the proposal, SMSF that are approved for three yearly SMSF audits would have all of their fund transactions for the previous three years audited rather than just the last year. To be eligible for three yearly cycles, the SMSF would need to have submitted their annual returns on time to the Australian taxation office (ATO) for the previous three years. If an SMSF moves to a three-year audit cycle under the new legislation, they will still be required to have an audit in the year any key event occurs. For example, 

A member of SMSF commencing a super pension income stream for the first timeDeath of a member of SMSF The addition of a new member The removal of a fund memberAny asset transfer made to fund members

If you need an SMSF auditor, you can search for one online via ASIC's register. These auditors have a valid SAN (SMSF Audit Number) that they are required to provide any SMSF returns that they submit to the Australian Taxation Office.

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