News

ATO, Auditing

ATO points to audit expectations when winding-up SMSFs

The ATO has reiterated the need for trustees to appoint SMSF auditors to complete the final audit of funds that are winding up, highlighting the auditor’s responsibility to check the fund is compliant with wind-up requirements.

The SMSF regulator said that as part of all final SMSF audits of funds that are winding up, the extra audit checks to be considered should ensure the wind-up requirements of the trust deed were being met and members agreed, in writing, to the fund being wound up.

Auditors are also required to check that benefits were only being paid to a member who met a condition of release, or transferred to another complying superannuation fund if they did not, or to eligible beneficiaries, or the legal personal representative.

The ATO also reminded auditors to check that financial statements accounted for assets, liabilities, income, expenses and final allocations to and payments from member accounts, and that no accrued income or expenses were overdue at the wind-up date except where a final tax assessment was pending.

Additionally, assets had to be disposed of at market value and where this was to a related party the disposal was supported by a written valuation from a qualified independent valuer.

Lastly, the ATO said auditors should also ensure written representation was supplied by the trustees that confirmed any bank transactions that occurred after the audit would comply with super laws.

In the event of auditors finding evidence of non-compliance, or if they have not been given enough audit evidence to support their opinion, the ATO advised they should qualify the auditor’s report.

“Where the trustees have left the bank account open, you can add a qualification to the auditor’s report. The qualification should say that you are unable to verify the compliance of transactions occurring after the audit date because the SMSF bank account has remained open to receive the final tax refund or pay the final tax liability,” it said.

The ATO’s list of audit requirements for winding up SMSFs follows on from the regulator’s recent reminder to auditors of their contravention reporting requirements.

Copyright © SMS Magazine 2019

ABN 43 564 725 109

Benchmark Media

Site design Red Cloud Digital