Audit more than compliance process

An SMSF auditor has claimed trustees should regard the annual audit as not just a compliance hurdle that must be completed, but as the first line of defence in preventing their fund being in breach with the ATO.

Reliance Auditing Services managing director Naz Randeria said while she agreed more tasks were being laid at the feet of SMSF auditors, despite trustees being responsible for what happens within their fund, trustees should not underestimate their work or value.

“From the trustee’s perspective, they need to understand when they are paying an audit fee it is not just to get a green tick. It is signing off to the ATO that you have done everything in your duty as a trustee and you have also done nothing wrong,” Randeria told selfmanagedsuper.

“Some might see it as the ATO pushing everything onto us, but I see myself as the first line of defence. I am not the last but the first to say ‘this fund is okay’.

“The ATO don’t have the resources to administer every single fund, so they rely heavily on us to be that first point of call.”

She added auditors also act as a third-party checking the input of other practitioners as trustees are often unable to fully assess that information.

“The second most important thing trustees often forget is while they may have a relationship with their accountant for a long time, that requires a level of independence or a level of judgment,” she said.

“Trustees might think their accountant is doing everything right, and they are in most instances, but do they have the technical competencies to check that? If they did, then they would be doing their fund.

“The rules are not getting any easier for trustees to pick up and read and understand.

“There are so many moving parts and we are the ones protecting the assets of the fund, the compliance of the fund, that trustee obligations have been met and everything has been done correctly, and it is sometimes a thankless job.”