The partner of a major accounting firm has alerted auditors to their responsibilities with regard to the trustee declaration as per the ATO’s amended attitude to this compliance area.
“The ATO has made it very clear that auditors need to keep copies of the [trustee] declarations on their files each and every year. And [section 104A of the Superannuation Industry (Supervision) Act] actually talks about retaining the declaration for a period of 10 years or as long as is required, and ‘as long as is required’ is very clearly as long as that person is a trustee of the SMSF,” BDO Australia superannuation partner Shirley Schaefer told attendees of The Tax Institute Super Intensive event hosted online last week.
Schaefer pointed out this requirement is significantly different from accepted audit procedures of the past.
“The approach in the past has been that, particularly if it was an established fund and we weren’t involved at the time [of establishment], we would rely on trustee representation that they’ve retained these records [and] that they’ve all been executed properly,” she noted.
“We can no longer do that because auditors are being picked up [by the ATO] for not checking it.”
As such, she said accountants and trustees should be prepared for auditors to ask for a copy of the signed trustee declaration for their files even if they have never done so previously.
On a related issue, she acknowledged the importance of having the documentation regarding the appointment of new SMSF trustees properly executed.
“Only a couple of weeks ago I had two incidents in two days where the [appointment] forms weren’t executed properly,” she revealed.
“What had happened was a fund had been set up, the names of the trustees had been typed into the form along with a date that was hard coded, the trustees signed it and the witness to the signatures signed the form a month [afterwards].
“It’s a little bit obvious, but it means the form [has not been] accurately completed and it will lead to a contravention and it’s a reportable contravention, which is probably the sad thing.
“I know it seems really inane to be talking about dotting i’s and crossing t’s, but this is what auditors are measured on so this is what you as the advisers to the fund also need to be focusing on.”
