A specialist adviser has called on SMSF trustees to consult with their fund’s auditor more often, particularly when looking to implement intricate member strategies in the current coronavirus environment.
“With COVID, trustees have got to know who their auditor is if they’ve got complex scenarios they’ve got to try and [navigate],” Verante director Liam Shorte said during the latest SMSF Association Sydney Chapter meeting.
To this end, Shorte pointed out interaction with the fund’s auditor can be of greater value for trustees than meeting with their adviser.
“There’s no point coming to me as an adviser and [asking] is this [strategy] going to work? More and more I’m [telling clients] I want you to talk to your auditor first and ask them what they want to see before we put that strategy in place here,” he noted.
“I [tell them] I can do it, but I’d rather you understood the whole process, [such as] why I’m doing all of this documentation, because that person is going to be responsible as to whether to report a contravention or come back to you with a management letter saying this is how you need to change [the strategy].”
According to Shorte, traditional attitudes where trustees regard the auditor as a person playing a role in the background of running an SMSF must change now.
“The auditor needs to know more about what’s happening in the fund and the trustees need to know why so much extra information is being asked for nowadays,” he said.
He pointed out the amended auditor independence standards have exacerbated the situation as in many cases trustees will be dealing with new auditors requiring more information to establish historical practices of the SMSF.
“[Often trustees are saying] we didn’t need [to do this] two years ago and I [tell them] that’s because your accountant used to [conduct] the audits as well and he let you get away with it,” he said.
