SMSF rules are strict when it comes to administration. It is a legal requirement that your SMSF be audited each year, even if no super contributions or payments have been made. The audit must happen at least 45 days before the date you need to lodge your fund’s annual tax return.
Your SMSF auditor must be registered with the Australian Securities and Investments Commission (ASIC). Their registration number must be provided on your annual self-managed super tax return.
They must also be independent of your fund. That means they can’t be a member of it, nor can they be in a close personal or business relationship with any of its members or an SMSF trustee.
What happens in an SMSF audit?
An SMSF auditor will:
- Examine your fund’s financial statements. It’s best if these statements are prepared by your accountant. These statements will reflect information about your self-managed super accounts and transactions for the financial year (for example, details of fund investments and member contributions and/or payments).
- Assess your fund’s compliance with superannuation law. If there are specific breaches, they must report them to the ATO. They will also advise the self-managed super fund’s trustees of these breaches, which should be rectified as soon as possible.
What records do I need for an SMSF audit?
SMSF trustees are required to ensure that accurate financial records are kept. SMSF auditors any request for any or all of the following information:
- Minutes of all investment decisions made (including why a specific fund investment was chosen and whether all fund trustees agreed with the decision). These minutes must be kept for a minimum of 10 years.
- Accurate and up-to-date accounting records for a minimum of five years. These records should outline the SMSF’s annual transactions, operating statement and financial position.
- Copies of a self-managed super fund’s annual tax returns for the past five years.
- Records of any changes in SMSF trustees for the past ten years.
- Trustee declarations of obligations and responsibilities for at least ten years.
- Copies of all reports given to the self-managed super fund members over the past ten years.
- Documents explaining how any collectable and personal use assets that the fund may have been stored. Records of this must also be kept for a minimum of ten years.
Any information that your SMSF auditor requests must be provided within 14 days.
How much does an SMSF audit cost?
The most recent data available from the Australian Taxation Office (ATO) shows that the annual audit fees for the majority of SMSFs are less than $1,000. The amount charged varies depending on factors such as:
- The complexity of the SMSF, the SMSF investment strategy and the number of transactions made.
- The number of members in the SMSF
- Whether the fund has members in the accumulation and/or pension phases.
When do I have to lodge my SMSF tax return?
Not all SMSFs have the same lodgement due dates each financial year for their annual tax returns. Your accountant or tax agent will be able to advise you on your due date.
Failure to lodge by the due date can incur penalties and the loss of your SMSF tax concessions.
This article is for general information only. It does not make recommendations nor does it provide advice to address your personal circumstances. To make an informed decision, always contact a registered tax professional.