SMSF auditing is a fairly simplistic and process oriented task. But when you are not prepared properly it can become a daunting one. SMSF auditing issues arise when you and your auditor are not on the same page and therefore it leads to delay or loss.
Today we discuss some really important SMSF auditing issues that are common and some issues that are not known until you as an SMSF trustee gain years of experience. So ensure that you are wiser and you can save yourself from these issues. Read on:
5 SMSF auditing issues you must know :
1. SMSF Member Trustee Obligation
This is the most common SMSF auditing issue, because many investors start a fund without knowing the obligations and therefore blame ATO or the auditor for raising contravention reports. It is impossible to resolve until they learn about the guidelines or get a SMSF advisor on board. SMSF investment and management is a major obligation for any SMSF member or trustee.
2. SMSF Auditor Obligation
While the fund owner can be from a non-financial background, but the auditors are certified experts. This is understood by all auditors and if they play their roles properly auditing is over and out within 7 days. But issues arise if they are not doing the job, like not getting the audit checklist filled, or raising audit reports on time. Hence, time is of the essence and accuracy of audit too.
3. Fund Investment Strategies
While auditing your entire investment history comes in front of your eyes, through your auditor. He/She can literally examine and inform you like a doctor, what is wrong with your fund. Here, your fund investment strategies are seen with a naked eye and you are made aware if you are going in the wrong direction or not. Also, all funds must follow a strategy; it is a big issue if you are not following. Each investment must be compliant according to ATO-SMSF investment rules.
4. Asset Ownership
Another common problem that many investors overlook and are later reminded by the auditors. It is the furious case of asset ownership. If the asset is under someone else’s name, you are in a pit. Such issues can be addressed as you need to follow the ATO regulations when submitting your documents. You will need a really good auditor for this problem though.
5. Trust Deed Witnesses
We al know that a SMSF begins with member or members signing a trust deed. According to ATO, all trust deed signatures must be done in the presence of witnesses and it is often ignored. This issue can be solved by adding a proper date on your trust deed and ensuring you sign it in front of a third party.
Want to know more about SMSF audits? Contact our experts on 1300 707 325 or [email protected] today.