The typical expenses of a SMSF may include:
- Administration fees;
- Audit fees;
- Actuarial advice;
- Legal advice;
- Valuation fees;
- Accounting and tax agent fees;
- Superannuation supervisory levy;
- Investment management fees and financial planning advice;
- Bank fees;
- Property expenses;
- Insurance premiums paid; and
The audit assertions with respect to a SMSF’s expenses are:
- Occurrence – expenses recorded by the SMSF were incurred.
- Completeness – expenses incurred by the SMSF have been recorded.
- Accuracy – expenses have been recorded appropriately.
- Cut-off – expenses have been recorded in the correct period.
- Classification – expenses have been allocated to the applicable accounts or members to which they relate.
Audit risks to be considered in relation to auditing expenses may include:
- personal expenses of the members or trustees are recorded as expenses of the SMSF;
- expenses of the SMSF paid by a member or an employer are not recorded as concessional or NCCs; and
- incorrect tax treatment of an expense.
Ordinarily, the auditor reviews any payments made to individual trustee or corporate trustee to validate that the payment was bona fide and not an early benefit or a payment for trustee services to the SMSF, which are prohibited.
See section 17(B) of the SISA.