SMSF auditors have been reminded they no longer have to review superannuation contributions and the application of caps for members of a fund in parts of their audit work as these no longer operate under super legislation, a veteran technical expert has said.
The Auditors Institute ambassador Graeme Colley said he was still seeing some confusion from auditors about what they were required to consider as part of a compliance audit in regards to contributions and the new caps that apply from 1 July.
“These auditors tend to confuse their audit work under the Superannuation Industry (Supervision) (SIS) Act, which is what they are statutorily required to do, and mix that up with things that are only required under the Income Tax Assessment Act 1997,” Colley said during a webinar held by the institute yesterday.
“If we have somebody that wants to audit contributions and the new contribution caps, we need to think what this is about.
“The income tax law is about contribution caps and says ‘this is the level to which the government is prepared to go and beyond that there’s a penalty’, so you have to do something if you’ve got excess contributions, whether they’re concessional or non-concessional.
“This is not really an audit issue under the SIS Act and it doesn’t need to be audited. Neither does the acceptance of those contributions by the superannuation fund as there’s no limit on the amount of contributions that can be made, providing the age limits are met for the particular contribution.
“These days we are only looking at the age 75 limit and claiming of the deduction for that, as well as the meaning of the work test and they are all in the Income Tax Assessment Act.
“In my opinion, auditing contributions, and doing that for contribution cap purposes, is not required under the SIS Act because it’s only the acceptance of the contribution by the fund which is an issue and you only need to look at the age of the individuals involved.”
