​

Understanding the Role of SMSF Auditors
Self-Managed Super Funds (SMSFs) offer a unique way to manage your retirement savings, giving trustees control over their investments. However, with this control comes a significant responsibility to ensure compliance with superannuation laws and regulations. A critical part of maintaining this compliance is the role of the SMSF auditor. Auditors provide an independent review of the fund’s financial statements and compliance with relevant laws, ensuring the integrity and trustworthiness of the SMSF.

Trustee Interference: A Serious Offense
Recent discussions in the SMSF community have highlighted the grave consequences of trustee interference in the audit process. As outlined by DBA Lawyers special counsel Bryce Figot, auditors must report any attempts by trustees to unduly influence the audit outcome. This requirement is mandated under the Superannuation (Industry) Supervision (SIS) Act.

Legal Obligations and Penalties
According to the SIS Act, if an auditor suspects or identifies any attempt by a trustee to influence, coerce, manipulate, or mislead the audit process, they are legally obligated to notify the Australian Taxation Office (ATO) immediately. Failure to do so can result in severe penalties, including fines and imprisonment for up to 12 months.

Bryce Figot illustrates this with a hypothetical scenario: “Imagine you say to an SMSF trustee that you’re going to lodge an auditor contravention report (ACR) and they respond with threats of legal action against you. Section 130BA of the SIS Act states you, as the auditor, have to notify the regulator.”

The Risks of Non-Compliance
Auditors must stand their ground to maintain the audit’s independence and ethical standards. If an auditor chooses not to report a contravention and instead communicates it only to the trustee, they expose themselves to greater risk. The ATO’s Practice Statement Law Administration 2018/1 advises its staff to refer such auditors to the Australian Securities and Investments Commission (ASIC) if they fail to lodge an ACR when necessary.

Protecting the Integrity of SMSFs
For trustees and members of SMSFs, it’s essential to understand the importance of an independent audit and the severe consequences of interfering with this process. An unbiased audit protects the fund’s integrity, ensures compliance with superannuation laws, and ultimately safeguards the members’ retirement savings.

Conclusion
Interfering with an SMSF audit is a serious matter with significant legal repercussions. Auditors are required by law to report any trustee interference to the ATO to maintain the audit’s integrity and compliance with the SIS Act. For trustees, respecting the auditor’s independence and understanding these legal obligations is crucial for the continued trust and transparency in managing your SMSF.

Stay informed and ensure your SMSF operates within the bounds of the law, protecting your retirement savings for the future.

For more detailed information, read the full article on SMS Magazine here.

About Superannuation Audit Services

 

Superannuation Audit Services is a leading SMSF auditing company based in Melbourne, with a broad reach servicing clients Australia wide. Our experienced team is dedicated to delivering reliable and thorough audit services to ensure compliance with regulatory requirements, offering peace of mind to our clients.