The ATO has warned trustees of SMSFs that they must appoint an approved auditor no later than 45 days before lodging their SMSF annual return (SAR).
The tax office said that if trustees wait till the day before they need to lodge their SAR to approach an auditor it would result in an overdue lodgement.
An approved SMSF auditor must be registered with ASIC and must have an SMSF auditor number, which was required to be provided on the trustee’s annual return.
The ATO also reminded SMSF auditors that they had to be independent and not audit a fund that they held any financial interest in or a fund where they had a close personal or business relationship with the SMSFs trustees or members.
The office warned trustees that even if no contributions or payments were made in the financial year, an audit would still be required as part of the SAR.
The auditor of an SMSF would also be required to provide trustees with a copy of the independent audit report (IAR) within 28 days of completing the audit.
The information in the completed IAR would also be needed so that trustees could finalise their SMSF’s SAR.
To ensure compliance in the management of the fund, the appointed auditor would be required to include any issues or contraventions that it found to be included in the IAR and also a management letter for the fund.
The tax office said that if a violation was discovered to have occurred, the SMSF’s trustees were required to rectify it as quickly as possible or, at minimum, have a plan to rectify it.
The selected SMSF auditor would also be required to report the breach to the ATO and if an infringement continued to be unrectified for an extended period the ATO encouraged trustees to make a voluntary disclosure.
The tax office said that it would consider all voluntary disclosures provided when it had to determine what action to take against the breached SMSF.
