Over the last ten years, the Federal Government has been taken by surprise by the number of Australians opting to manage their own superannuation. There is now more than $460 Billion in retirement funds invested in SMSFs in this country. The Government’s response to the growing numbers of SMSFs has been to increase regulatory supervision, including the requirement as of July 1st 2013 for specialist SMSF auditors to register with ASIC. Only specialists can now conduct a fully compliant audit of SMSFs. The ATO has also announced that it will be conducting thousands of random audits of SMSFs itself.
Under the provisions of the Superannuation Industry (Supervision) Act, failures to comply with the Regulations carry severe criminal and civil penalties. Any breach is an offence of strict liability, meaning that even accidental lapses in recording minutes can result in the SMSF being declared non-compliant. The ATO has the power to tax a non-compliant fund up to 46.5% of its total value.
Trustees, Accountants, Financial Advisers and other professionals involved with the business of the SMSF can all be held accountable, so the role of the Auditors is critical to ensuring full compliance.
When people’s retirement income is at stake, this level of scrutiny from the regulators is to be expected.
It is necessary to have a checklist which sets out exactly what is needed to do and shows how much is involved in a fully compliant audit. Our checklist runs to over 40 pages, requiring us as Auditors to understand and verify the assets and actions of each fund.
David is the Director of Saul CA and has more than 15 years’ experience as an auditor and an accounting practitioner. He can be contacted on 02 9248 0129 or via www.saulca.com.au
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