The ATO has released an extensive list of areas for SMSF auditors to consider when conducting Part B of the audit process, stating the recommendations are its minimum expectations of what would take place during that exercise.
The list, which was published on the regulator’s website yesterday under the section devoted to SMSF auditors, noted the requirements a practitioner had to meet before conducting an audit, as well as the relevant sections of the Superannuation Industry (Supervision) (SIS) Act and Regulations that should be considered in the process.
In regards to the SIS Act, the ATO outlined 19 areas auditors had to consider, ranging from document keeping to the appropriate use and treatment of assets, while a further 11 areas were flagged under the SIS Regulations, including pension and benefit payments.
However, the regulator noted auditors should not view checking files against the act and regulations as the only criteria for a compliant audit.
“This guidance does not replace or limit any professional obligations or standards that you are required to meet,” it added.
“You must consider the circumstances of your client when planning an SMSF audit. In some circumstances, you will need to collect additional evidence and perform additional tests.”
Shifting its focus to the audit process, the ATO added an auditor must be sure SMSF trustees had met the requirements set out in super laws.
“When doing the compliance audit, you must consider materiality and risk, obtain sufficient and appropriate evidence on which to base your conclusions and test identified contraventions against the auditor/actuary contravention report (ACR) reporting criteria,” the regulator said.
Auditors were also required to document conclusions, opinions and judgments in writing and keep them with audit working papers, which should be included with the audit to allow another practitioner to understand the work performed and the opinion reached.
Professional opinions are also required to be reported in the independent auditor’s report and trustees and the ATO were to be informed, via the ACR, of any contraventions that may have occurred, are currently happening or will occur in the future.
In terms of practitioner requirements, the ATO stated: “As an approved SMSF auditor, you must possess the required capabilities and competencies to conduct a compliance audit of an SMSF. This includes having full knowledge of the relevant legislation and its application to SMSFs.”
Auditor compliance has been a long-standing area of focus for the ATO, which stated in February it was looking at those who engaged in a high number of audits, undercharged for their services or did not meet independence requirements.
