The ATO has issued a reminder to SMSF auditors that their audit files need to include a signed and dated trustee letter before they are completed.
The regulator said it continues to identify unqualified SMSF audits that do not include a compliant trustee representation letter (TRL) and reminded auditors that it forms a key part of their audit evidence.
“It supports your conclusions across several Superannuation Industry (Supervision) Act 1993 requirements and underpins the independent auditor’s report (IAR),” it said.
Recent reviews of SMSF audits by the ATO have discovered TRLs missing from audit files, left unsigned or undated, incomplete or signed after the completion of an audit.
Such issues are ‘procedural and preventable’, according to the regulator, which also reminded auditors that trustees or directors of the corporate trustee must sign and date the TRL before the practitioner completes the audit.
A TRL needs to be signed by all trustees stating that, to the best of their knowledge, they have approved and acknowledge responsibility for financial statements and the fund complies with superannuation law.
“Do not sign the independent auditor’s report until you obtain and retain a complete TRL as part of your audit evidence,” the ATO said.
The TRL may not be sufficient and appropriate audit evidence on its own, but in some cases, it can be used to verify compliance with certain trustee record-keeping and retention requirements listed in the IAR.
“These include maintaining accounting records for five years, retaining the trustee declaration and keeping trustee meeting minutes, trustee change and consent records, and member reports for 10 years,” the regulator said.
If a compliant TRL is not obtained, an IAR may need to be qualified and an auditor contravention report lodged if the reporting criteria apply.
The ATO said the quality and completeness of the TRL contribute directly to its assessment of audit quality and missing or deficient TRLs remain a common issue in matters referred to the Australian Securities and Investments Commission.
