A technical specialist has identified one area to which accountants servicing SMSF clients can give greater attention to improve the efficiency of the annual fund audit process.
“The one thing that you, as an accounting firm, can control if we’re just looking at the audit, is the source documents. What we often see is that when a job is loaded and it’s ready for audit it’s not actually ready for audit because all of the [relevant] documents haven’t been provided,” Seamless SMSF head of technical and training Frank La Spada noted during a recent technical webinar hosted by Accurium.
La Spada said this is an area of the audit that should never have any ambiguity attached to it.
“There shouldn’t be any document queries. Maybe there are going to be some technical questions from your auditor. Maybe they’re going to want to test something, but really if you’re following the right processes, you should not have document-related questions,” he said.
“They should be very minimal.”
According to La Spada, accountants may not always know the documents that must be produced for the audit and to this end he suggested auditors had a responsibility to be proactive in the process.
In order to achieve this, he advised auditors to provide accounting firms with a checklist informing them of the documents required to be provided before the audit can be performed.
With regard to specific issues causing concerns during SMSF audits, he identified a few particular types of transactions.
“In terms of the most common contraventions, I’d have to say it would be loans, unlisted unit trusts [and] financial assistance. Those types of breaches,” he shared.
“[They’re] actually the most common contraventions for not just this year, [but] also in previous years.
“It’s definitely where the most problems occur and it is something I would highly recommend [accounting teams] have some understanding of.”
