SMSFs are a specific type of superannuation fund which have fewer than five members and are regulated by the Australian Taxation Office (ATO). In addition, the SISA gives ASIC the responsibility for the registration of approved SMSF auditors and setting competency standards. SMSFs are primarily governed by the requirements of the SISA, SISR, the Income Taxation Assessment Acts 1936 and 1997 (ITAA) and a fund’s governing rules, which include the trust deed and applicable legislation. Complying SMSFs are eligible for tax concessions and may also receive Superannuation Guarantee Contributions (SGC). Complying SMSFs are Australian superannuation funds, which meet the requirements of the SISA and SISR and are “regulated” under the SISA.
The SISA, subsection 35C(1), requires SMSFs to be audited each financial year by an approved SMSF auditor (the auditor), who is required to complete both the financial audit and the compliance engagement and sign the auditor’s report before a SMSF may submit its Annual Return. The auditor reports to the trustee in the “approved form”, as issued and updated from time to time, by the ATO, which includes opinions under two sections:
- Part A: Financial report; and
- Part B: Compliance report.
This Guidance Statement has been developed to identify, clarify and summarise the existing responsibilities which the auditor has with respect to conducting SMSF audits, and to provide guidance to the auditor on matters which the auditor considers when planning, conducting and reporting on the financial audit and compliance engagement of a SMSF.
This Guidance Statement does not extend the responsibilities of the auditor beyond those which are imposed by the SISA, SISR, Australian Auditing Standards (Auditing Standards or ASAs), Standards on Assurance Engagements (ASAEs) or other applicable legislation.
This Guidance Statement comprises:
- an introductory section, which provides guidance on matters common to both the financial audit and compliance engagement;
- Part A, which provides guidance on the financial audit;
- Part B, which provides guidance on the compliance engagement;
- Appendices 1 – 4 which provide sample templates and checklists; and
- Appendix 5 – provides a table of abbreviations used in the Guidance Statement.
This Guidance Statement is to be read in conjunction with, and is not a substitute for referring to the requirements and guidance contained in:
- the Australian Auditing Standards, in which references to the “auditor” includes an approved SMSF auditor conducting the financial audit of a SMSF;
- applicable Standards on Assurance Engagements, specifically ASAE 3100 Compliance Engagements, in which references to the “assurance practitioner” include an auditor conducting a compliance engagement of a SMSF;
- the SISA and SISR;
- applicable ATO Rulings, Interpretive Decisions (ID) and Guides and the Income Tax Assessment Acts;
- APES 110 Code of Ethics for Professional Accountants (including Independence Standards); and
- applicable ASIC Regulatory Guides and Class Orders.
This Guidance Statement does not provide guidance on auditing a defined benefit fund as these funds are not prevalent as SMSFs.
See Division 1, section 6 of the SISA.
Regulated funds, under section 19 of the SISA, are funds which have a trustee, either a corporate trustee or governing rules which contain a pension fund and have made an irrevocable election to become regulated in the approved form within the specified time.
The SMSF Annual Return (NAT 71226) comprises income tax reporting, regulatory reporting and member contributions reporting.
The use of the terminology trustee and trustees is used interchangeably throughout this document. Trustee or trustees include individual trustees, collective group trustees or a trustee body of a SMSF.
The approved form auditor’s report is contained within the Form for approved SMSF auditors - Self‑managed superannuation fund independent auditor’s report (NAT11466).
Defined Benefit Fund defined in Regulation 1.03(1) of the SISR.