Auditing, Technology

Data feeds fail audit standard

data feeds smsf audit

Data feeds cannot replace physical bank statements to verify the monetary transactions entered into by an SMSF for the fund’s year-end audit.

A specialist practitioner has emphasised data feeds cannot be relied upon to serve as the definitive information source for monetary transactions entered into by an SMSF for year-end audit purposes.

Speaking at The Tax Institute National Superannuation Conference held in Sydney last week, BDO Australia superannuation partner Shirley Schaefer noted a higher level of assurance regarding the actions of an SMSF will need to be established for the yearly audit to be performed properly – one that cannot be provided by data feeds.

“[A question we hear often] as auditors is: ‘It’s on data feed, why do you need the bank statement?’ As an accountant I know what happens to data feeds. I know that I can go in there and I can delete transactions and I can add transactions,” Schaefer said.

“[Also] mostly the data feeds are not audited so we certainly still need to verify those balances at year end.”

The individual practitioner will determine the degree to which physical records will need to be sighted, she said.

“It will depend on your auditor whether they want all of the bank statements for the year or whether they only want the year-end one, but certainly we still need to verify that year-end balance and of course there are a lot of accounts and term deposits which aren’t on data feeds anyway so we would need original documentation for that,” she noted.

On the subject of digital approvals, she said auditors are more accepting of them compared to data feeds, but would likely still insist on additional verification procedures.

“You’ll find most auditors will be happy to receive electronically signed documents, but they’ll probably want to check the trail. They’ll want to see the verification page, they’ll want to know what the processes are for getting those electronic signatures on documents,” she revealed.

“My preference is for everyone to sign everything [and] certainly the trustee declaration letter [even though] the legislation does only require 50 per cent of trustees [to sign it] if [there are] more than two members in the fund.”

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