ASIC SMSF auditor registration
From 1 July 2013, ASIC’s new register for self-managed superannuation funds (SMSFs) came into effect as part of the federal government’s ‘Stronger Super’ reform program. The program was implemented to improve community confidence in the superannuation sector, as well as to maintain the sector’s integrity overall.
The Australian Securities and Investments Commission (ASIC) is responsible for the registration and approval of SMSF auditors, and sets relevant competency standards. As a result, ASIC has the power to suspend, cancel, and disqualify auditors where appropriate.
Under section 128F of the Superannuation Industry (Supervisory) Act 1993, approved SMF auditors are required to comply with a set of ongoing obligations which are set by ASIC. In addition, auditors are required to act in compliance with a set of standards issued by the Auditing and Assurance Standards Board.
From 1 July 2013, any auditor wishing to sign off SMSF audit reports must be registered with ASIC. Applications for ASIC registration should have been made by 30 April 2013, but a more detailed timeframe can be found on ASIC’s website. There are a set of minimum requirements set by ASIC which apply to those wishing to register as SMSF auditors. These requirements relate to education, experience, and general competence as well as maintaining professional indemnity insurance.
Existing approved SMSF auditors may have applied for a new registration in compliance with transitional arrangements in place between 31 January 2013 and 30 June 2013, which would have exempted them from some of the registration requirements.
More detailed information can be found in ASIC’s Regulatory Guide 243 Registration of self-managed superannuation fund auditors and in Class Order (CO 12/1687).
Overview of an SMSF Audit
Australian superannuation funds are subject to the Superannuation Industry (Supervision) Act 1993 (SISA) and the Superannuation Industry (Supervision) Regulations 1994 (SISR).
Under section 35C of SISA, all superannuation funds are required to be audited on an annual basis regardless of their size of type. There are two components to these audits:
• Audit of the financial report – In order to enable the auditor to come to a conclusion based on the fair presentation of the financial report in compliance with appropriate accounting policies. This part of the audit must be conducted in compliance with the Australian Auditing Standards.
• Compliance audit – This enables the auditor to come to a conclusion relating to the compliance of the trustees with the requirements laid out in the SISA and the SISR. A compliance audit is conducted according to the requirements of the Australian Standards of Assurance Engagements.
When providing an audit report, the auditor is required to use the ATO approved form. This form covers both the compliance audit and the financial report audit. An auditor’s considerations must be made in accordance with the sections and regulations specified in the approved form of the audit report.
SMSF audit reports are not required to be lodged with SMSF Annual Returns. Regardless, details of compliance breaches or qualified audit reports must be provided.
What is an SMSF?
A working definition is provided in section 17A of the SISA. According to this section, an SMSF generally has the following traits:
• It has less than five members;
• Each trustee or director of the corporate trustee is a fund member, unless the fund is a single member fund. In the case of a single member fund, the sole member is either the director of a corporate trustee, or one of a pair of directors which are related; or one of a pair of trustees of whom the additional trustee can be anyone besides an employee of the member (unless the employee is related).
• Each of the fund’s members is either a trustee or a director of the corporate trustee;
• None of the fund’s members are employees of another member, unless they happen to be relatives.
• None of the trustees, or their directors (if a corporate trustee) receive remuneration for duties or services performed in relation to the fund.