The ATO has issued guidance on changes to the 2019 SMSF annual return ahead of the financial year end, highlighting the inclusion of Part A audit qualifications that will be used to build a clearer risk profile of the SMSF population.
The SMSF regulator said trustees will now be required to answer ‘yes’ if the audit report was qualified at Part A, the section of the report giving the auditor’s opinion on whether the fund’s financial statements are fairly presented, regardless of the auditor’s reasons for the qualification.
“In prior years we advised you could answer ‘no’ if the only reason the auditor qualified Part B was because they could not confirm the information provided to them. This is no longer the case. Your answers must correctly convey the auditor’s written opinion,” it said.
It stated the new information provided in the annual return would help the regulatory body build a more complete risk profile of the SMSF population and would be one of the factors taken into account when making a risk assessment of the SMSF. It urged trustees who received a qualified audit report from their auditor to focus on whether any of the underlying issues could be rectified.
“You can also make a voluntary disclosure to us. If we do commence an audit, we will take your disclosure into account in determining any enforcement action and the appropriate level of remission of administrative penalties,” it added.
As part of the latest guidance, it also pointed to the addition of a new label to the member sections of the SMSF annual return to report the outstanding limited recourse borrowing arrangement (LRBA) amounts for each member, which will be used for statistical purposes.
“You should report the outstanding loan balances for all LRBAs, and not just those that would have been caught by the proposed changes for total superannuation balance purposes,”” it said.
“The reported amounts will not be used in calculations of a member’s total superannuation balance.”