ATO finds lack of super law knowledge for SMSF auditors

16 July 2020
| By Jassmyn |
image
image
expand image

A lack of knowledge on superannuation laws is one of the biggest issues the tax office has found when reviewing the performance of self-managed superannuation fund (SMSF) auditors.

This was one of eight issues the Australian Tax Office found that also included auditor independence, insufficient documentation, and insufficient evaluation of evidence obtained to show the auditor appropriately formed an opinion on the fund’s compliance with the relevant super laws.

It noted that it would refer an SMSF auditor to the corporate watchdog if they had failed to perform their duties under the Superannuation Industry (Supervision) Act 1993 (SISA), had breached a provision of the SISA or Superannuation Industry (Supervision Regulations 1994 (SISR), or was not “fit and proper” to be an approved SMSF auditor.

One of the common areas where auditors failed to obtain sufficient evident to support their opinion were:

  • Market valuations for unlisted assets;
  • Documents supporting a limited recourse borrowing arrangement (LRBA), including obtaining the loan agreement or bare trust deed; and
  • Valuation evidence for collectibles including insurance.

Unsigned documentation was also an issue including for trustee representation letters, engagement letters, management letters, and financial statements in particular.

The ATO also noted other issues were:

  • Failure to bring immaterial breaches to the trustee's attention in a management letter such as breaches relating to separation of assets; and
  • Failure to report contraventions to us – you must report all contraventions that meet the reporting criteria, even if they have been rectified during the year.
Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest developments in Super Review! Anytime, Anywhere!

Grant Banner

From my perspective, 40- 50% of people are likely going to be deeply unhappy about how long they actually live. ...

11 months ago
Kevin Gorman

Super director remuneration ...

11 months 1 week ago
Anthony Asher

No doubt true, but most of it is still because over 45’s have been upgrading their houses with 30 year mortgages. Money ...

11 months 1 week ago

Jim Chalmers has defended changes to the Future Fund’s mandate, referring to himself as a “big supporter” of the sovereign wealth fund, amid fierce opposition from the Co...

1 day 6 hours ago

Demand from institutional investors was the main driver of growth in Australia’s responsible investment (RI) market in 2023, as the industry continued to gain momentum....

1 day 6 hours ago

In a new review of the country’s largest fund, a research house says it’s well placed to deliver attractive returns despite challenges....

1 day 7 hours ago