Monthly Archives: March 2013← Older posts
The Trustees of Self Managed Super Funds often rely on the annual accounts to see what the value of their fund is. There are also some Trustees who are actively involved in the management of the assets and know exactly what their investments are doing.
It is not very helpful to receive the financial accounts six to nine months after the end of the financial year and realise that some input at an earlier date may have increased the value of the fund.
Most software for super funds these days can generate up to date reports. This would entail getting the work in earlier and would assist in not having that bottleneck that accountants find themselves in around this time of the year. Clients love to have up to date information, they usually just don’t know how to go about getting it.
For many years firms have prepared the financial accounts for super funds and also audited the funds.
Why should the audits be outsourced?
-Takes away the cost of training your staff in your office
-Your relationship with your client is fully protected
-The auditor has P I Insurance
When you have been doing SMSF auditing for as long as we have you get a feel for the common mistakes: Continue reading →
Trustees often do not understand why the auditor asks for a bank confirmation. The auditor must follow auditing guidelines and meet auditing standards. They must also comply with superannuation legislation.
The auditor can place greater reliance on evidence obtained directly from a third party according to auditing guidelines.
Do you feel as though your SMSF auditor understands the pressure you are under? Running an accounting practice is very hard work and all consuming. There never seems to be enough time to do what needs to be done. Everyone wants a piece of you! It seems like one deadline after another.
It is not just a matter of getting an auditor to tick the boxes and sign off on the audit, that would only add to the stress. What you need is for the super fund audit to be completed to the highest professional standard and in a timely manner. A good auditor will supply a comprehensive checklist, requesting the accountant supply certain documentation and information and then proceed with the audit. If an issue arises, the auditor would need to discuss the issue with you and resolve the issue as soon as possible. You already have enough oustanding matters to deal with.
When a members account is in pension phase, there is no tax payable on investment earnings and capital gains. To enjoy this advantage, there are rules which must be followed.There is a minimum and possibly a maximum pension which must be paid, depending on the members age and account balance.
If these requirements are not met then the SMSF auditor may have to report to the ATO. This may then mean that the ATO considers that the fund is not in pension phase and therefore taxable.
As with all matters regarding the super fund, it is most important that that any breaches be addressed and rectified as soon as possible. Discussion with the auditor will greatly assist this process.
There is much discussion about the cost of auditing a self managed super fund.
We should be looking at the cost of the audit not being done to the highest professional standard.
If the audit is not done in accordance with auditing and accounting professional standards and the guidelines set out in GS009, the cost could be very high. The Trustee of the super fund may not understand what needs to be done in the audit process. They may be very happy at first that the accountant has managed to have the audit completed for a minimal fee. However, the Trustee is unlikely to be pleased when the ATO audits the super fund and finds breaches that could have easily been rectified at the time of the breach.
At risk then, is the auditor, the Trustee and the relationship between the accountant and the Trustee. Is it worth it?
Drop Box is a convenient way to transfer files to Audit My Fund. They can be too big to email and Drop Box is quicker than sending a usb or disk containing the SMSF files. It’s free if you just want to put your files there for us to pick up.
We have been asked why we want to check the share registry when we have the dividend statement and the holding statement.
Both these documents will be dated prior to 30 June which is the date at which we are verifying the assets. Because a share was held at the dividend date in March does not confirm that the share was still held on 30 June.
When we are verifying assets on share registries, we can also confirm the name that the share is held in.
The only way to confirm that the property held in the super fund is still in the name of the Trustees and is unencumbered is to have a title search done.
We have had situations where the Trustee of the fund has been changed but the old Trustee still appears on the title as the owner of the property. In one situation, the owner of the property was a company which had been deregistered.
There have also been situations where the wrong property was used as security for a loan and the mortgage was taken over the property in the super fund.
The guidelines in GS009 must be followed and third party confirmation is always the best audit evidence.