SMSF auditors should alert trustee clients if they believe a trust deed is deficient or not compliant to prevent legal action, including noting whether they are operating with an original document or a verified copy, a technical specialist has stated.
Auditors Institute ambassador Graeme Colley said under Guidance Statement (GS) 009 issued by the Auditing and Assurance Standards Board, SMSF auditors are required to check whether a fund’s governing rules are properly executed and this meant being sure the current deed was compliant and up to date.
“Trustees will often claim they have a standard deed and things are fine, but just because they have a copy that’s unsigned, does that mean the original copy is signed or unsigned?” Colley said at the institute’s recent Auditor Day 2025 in Melbourne.
“If they have a photocopy of the deed, do they know where the original is and has somebody sighted the original or do they have a certified copy of the trust deed?
“If they are presenting a copy of an executed trust deed, is it the last in a line of amended trust deeds because the older the trust deed, the more likely it is to have amendments for various reasons?
“So you need that historical line from the date the trust and the SMSF was set up, and if there are amendments subsequent to that, make sure all those amendments have been executed and they’re valid.”
He recognised this may go beyond the requirements of GS 009 in some instances, but noted the strong likelihood of an auditor still being held to account for not raising the issue.
“This may not be your job to check those details. Your job as an auditor is to consider it and make some statements on whether some work needs to be done to fix it,” he said.
“Don’t forget, if things go bad, you might be subject to a complaint, not with an issue with the ATO or the SIS (Superannuation Industry (Supervision)) legislation, not from a tax point of view and maybe not even from a trust point of view, but before the Australian Financial Complaints Authority.
“So that line of progression and what is the latest and up-to-date deed is really important. If there are holes in that, then you really need to advise trustees to get some legal advice to make sure they have that line of authority running right through it.”
