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Information flow vital to audit

A continuous flow of information between auditors and administrators would help close the gap between the two parties and result in a better outcome for trustees, according to an audit specialist.

“To get the best possible outcome, it’s best to work together,” WPIAS associate Michelle Patel told the SMSF Conference convened by ARC Super, NowInfinity and WPIAS Training in Queenstown, New Zealand, earlier this month.

“As the SMSF administrator, you often know about things well before they happen.

“So that continuous communication throughout the year means they will call me up for reassurance or maybe they know it’s absolutely the wrong thing to do, but they’d rather the auditor confirm it is non-compliant, then they can go back to the trustee to let them know it won’t pass the audit and will have a material impact.”

Alternatively, there were situations the auditor and administrator had to work through whereby the trustee knew of the outcome but chose to do it anyway, Patel said.

“So then you work with the auditor [acknowledging] that it’s going to contravene in the first year, but they have a plan to rectify it by this point so there’s minimal impact from the ATO,” she said.
“So that information flow, rather than everything being presented to the auditor much later after the fact, between the two parties is always going to add value.”

Communication, information flow and education equalled better results for SMSF trustees and a reduction of file handling and trustee contact, she said.

“It’s not about SMSF administrators and the SMSF auditor scrapping amongst ourselves about why we have to provide this or that, it’s about working together and having that relationship,” she said.

“I have that relationship with every single accountant that I deal with where I know that I’m not asking for unnecessary things and I may even be asking for something that’s absolutely required, but there’s always that point of contact where they will call me up and tell me it is just impossible to get a certain document, so what can we do instead and how can we work it out?

“It’s not about everything being set in stone and that without this [document] you’re going to get a qualified audit report.

“It’s about building those relationships so that we get the best possible outcome for the trustee.”

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