Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Hurdles ahead for new SMSF audit requirements?

The government will change the annual SMSF audit requirement to a three-year cycle, but some experts are predicting the move could increase the risks involved.

Budget papers reveal that the annual audit requirement for SMSFs will be reduced to three years where trustees have a good history of record keeping and compliance.

The budget papers said that the measure will apply to SMSF trustees that have a history of three consecutive years of clear audit reports and that have lodged the fund’s annual returns in a timely manner.

The new measure is intended to start on 1 July 2019. However, the government has said it will consult with stakeholders on the proposal.

Advertisement
Advertisement

BDO partner Paul Rafton said this proposal presents some potential risks and puts a lot of onus back onto the SMSF trustee.

“I don't think it's such a bad thing having a regular heath check on an annual basis from an independent auditor,” said Mr Rafton.

"It could mean that its three years before the ATO catch up with someone whose compliance history is not as squeaky clean as it used to be. So there's a three-year window really, if they've got a really good record and then for whatever reasons they go off the rails, it might be three years before the ATO and the auditor catch up with them."

Hayes Knight director Ray Itaoui agreed that the measure is likely to create “practical hurdles” for the industry and that having two years with no audits could present opportunities for creative trustees to manipulate the superannuation system.

“An auditor will also not be able to sign off on the third year without having a level of comfort as to what has transpired in previous years,” he said.

Hurdles ahead for new SMSF audit requirements?
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Dan Hadley JLB Adela... - Hi Ro,

Thanks for your question and it is actually quite a valid one. At present there are a number of companies working on flying car options. These.......
Lawrie - What happens when a payment is made by an employer prior to the 30th June (say 25th June this year) via a clearing house, but it takes the clearing.......
Dr Terry Dwyer, Dwye... - She is quite right of course. Returns to both capital and labour incomes are much reduced by taxation and it has increased enormously since the.......
Anonymous - A Bad call by the RBA. Lower interest will not stimulate the economy any more at 1.25% than at 1.5%, which was already too low. The imminent election.......