SMSFs (self-managed super fund) represent one of the fastest growing sector within the Australian super industry and as such provide a number of benefits to people in retirement, but also include a variety of requirements that you must fulfil in order to reap the advantages. This type of super fund is regulated by the Australian Taxation Office (ATO), which establishes all the relevant laws and rules that fund member must follow. For a SMSF to comply with the laws it should have fewer than 5 members, where each member would also have the role of a trustee. Members can be part of either an individual or corporate super fund structure. The role of a trustee in a corporate structure is held by a specifically set up company, while the members of the fund act as directors of that company.
Another important aspect of running an SMSF is the preparation of the annual audit. As a member of the fund you have to make sure your SMSF is audited each financial year by a registered auditor. The Smsf audit requirements are fairly simple and straightforward. The most important requirement that an approved auditor must meet involves residency. Auditors must be Australian residents and pass a competency examination. To be able to prepare your yearly audit, they should also have a high level of practical experience and have specific qualifications for the job.
Trustees are obliged to appoint an auditor within 45 days before the annual return is due to be lodged. You should provide the auditor with all the relevant documents and essential information so that he/she can properly conduct everything involving the finalisation of the audit. According to the Smsf audit requirements, auditors should complete the audit and provide the trustees with a comprehensive report within 28 days of obtaining all the necessary documentation. The auditors should know what kind of trust structure you have, what kind of investment are included in your investment strategy, who is involved in the management of the SMSF as well as be familiar with the related parties of all the members and trustees.
The complete SMSF audit includes the preparation of both a financial and a compliance audit. Through the financial audit your auditor will be able to check all the financial statements within the super fund. A compliance audit is performed with the main purpose to identify the compliance of your SMSF with all the relevant superannuation rules and laws.