Have a Question?
Our most frequently asked questions are below, but if you have any other question, please contact us and we’ll be happy to answer it.
SMSF Audits are a fairly standard process. Why are you any different?
The common impression is that SMSF Audits are a necessary rubber stamp, so all SMSF Auditors (and Audits) are the same.
ASIC and the ATO, as regulators, don’t see it that way, with 421 auditors (almost 8% of total registered SMSF Auditors) being disciplined or removed in FY 2023 (and inadequate new registrations to replace them).
Our testing, compliance procedures, problem-solving and direct contact with the ATO regarding compliance challenges comes from a pro-active mindset that respects SMSF Audits as an integral part of the compliance process.
How do I deliver my audits to you?
We understand that each firm has a system that works best for them and we want to receive files and deliver audit reports in the most seamless way for you.
BGL360 documents and workpapers? Great! Want to use Dropbox and have us access files? Great again! Want to email them manually? Works for us!
Do you charge a flat fee?
No. ASA500 plus ASIC and the ATO require auditors to gather sufficient evidence to support audit conclusions (both on the financial statements and compliance parts of an audit).
A flat fee is not conducive to this outcome, as it presupposes that every audit requires exactly the same process, evidence and conclusion.
For example, a fund invested in cash and a small share portfolio won’t have the same audit needs as a fund with multiple investment classes or LRBA.
The ATO have used analytics and will likely do so to look for flat fee charges and seek explanation whether an adequate audit has been done in every case (as they already have with low fee auditors).
Do you charge more for LRBA audits?
These are fundamentally the same as a standard property audit, as long as the bare trust deed, loan agreement and loan statements are supplied and the LRBA is (or remains) compliant. I have been working with LRBAs since 2009 (as an accountant then auditor), as they are an excellent way to grow a SMSF property portfolio using leverage, the same as an individual (but with CGT concessions that are insanely better).
Can I call/email you about a compliance question or for help?
Absolutely. This is a free service, and we encourage this, especially in cases of unusual compliance problems, or before the excrement hits the rotating cooling device with the ATO.
We find that ‘prevention is better than a cure’ and either avoiding a problem before it starts, fixing it before the audit report is signed off or getting the required information to speed up the audit is the best solution for your clients.
Why can firms not audit their own funds? Why can my auditor not audit all my funds?
APES110 addresses auditor independence and was updated to take effect from July 2021 (along with the ATO’s understanding of it). In house audits are viewed as inherently less independent. Our experience when taking over from in house audits is that compliance issues are more likely to be unaddressed, which places the accounting firm and their funds (even the compliant ones) at increased risk of ATO activity.
Also, some auditors are unable to audit all of an accounting firm’s funds, because the ATO view >20% of fees from one firm to be a potential independence risk (due to fee reliance). Many accounting firms are spreading their audits out across a number of firms, a practice we are happy to help with, without treading on anyone’s toes.
Can you be part of an ‘audit panel’ sharing an accounting firm’s SMSF Audits?
We welcome this opportunity. There are many excellent auditors and audit firms out there and we respect our SMSF Audit colleagues who, like us, care about their clients, compliance and their role in the system.
The accounting firm will benefit from a wide range of opinions, knowledge and specialisations by spreading out a large number of audits, as well as better workflow management (especially approaching May 15th deadlines).
We are a smaller/boutique firm with a small portfolio of SMSFs. How do you look after us?
As a boutique practice ourselves, we understand that a ‘one size fits all’ approach doesn’t work.
We were educated in, come from, have worked in, and remain committed to regional areas and smaller firms.
When added to our experience in large top 20 and international firms, this gives us a broad scope of understanding of all types of firms.
Most importantly, we understand that ‘prompt, old-fashioned service’ is essential for smaller and regional practices, as well as the ability to pick up the phone or send an email for help and know someone will quickly respond.
Valuations have been in the SMSF news lately. How do you deal with property valuations?
SIS Reg 8.02B states that all investments must be valued at market value.
It was once standard practice to value a property every three years. However, this practice has been specifically addressed by the ATO as never having been adequate (QC60453, issued 15.10.2020), since the changed Reg 8.02B came into effect on 07.08.2012. 1
This makes sense given the down-up-down-up-down nature of the property market before, during, and after COVID-19, plus the inflation-driven interest rate rises.
A real estate appraisal must be supported by surrounding sales around 30th June of the year involved (values can change even in a few-month window). Residential properties are easier because there will likely be plenty of publicly available information on realestate.com.au or onthehouse.com.au. Commercial properties are a little tougher to find that information (but not necessarily impossible – realcommercial.com.au sometimes has some good sales figures).
For difficult-to-value properties (unusual, or inadequate supporting documentation), we suggest a paid-for appraisal, which is available from a specialist in SMSF property requirements (and often cheaper than a full valuation).
Why are you so particular about Investment Strategies? Why do you keep asking for more audit evidence?
It’s a combination of the ATO’s focus, successfully sued SMSF Auditors (Cam & Bear vs McGoldrick, Ryan Wealth Holdings vs Baumgartner, plus Melissa Caddick’s disappearing act), and the protection of clients. 2
There must be consideration, decision documented and implemented in every Investment Strategy.
See our blog articles (or LinkedIn articles) for more detail.