17 August 2006 
 
The Institute of Chartered Accountants in Australia will distribute a CD ROM to 5,000 Chartered Accountants who audit Self Managed Super Funds (SMSF) this week offering information to help assist SMSF audits.  
 
The Institute has developed the CD with the Australian Taxation Office (ATO) to help auditors comply with the requirements of the Superannuation Industry (Supervision) Act (SIS).  
 
According to Hugh Elvy, Financial Planning and Superannuation Manager, Institute of Chartered Accountants in Australia: “Many members perform only a few SMSF audits a year and with multiple legislative requirements it can be challenging to stay up-to-date with standards. In addition, clients may not understand the difference between tax and SMSF audits and don’t see the need to hire one accountant for SMSF advice and another for the SMSF audit.  
 
“The CD uses work programs that walk auditors through the required steps to audit financial statements and to meet the relevant legislative compliance requirements of SIS,” said Elvy.  
 
The Institute recommends that firms segregate the conduct of a SMSF audit from preparation of the financial statements and other administrative functions by outsourcing the audit function or partnering with another firm in order to provide complementary but independent SMSF services.  
 
“The work programs’ step-by-step approach simplifies the audit process and those that use the guide are less likely to be in breach of the professional standards and subsequently less likely to be audited by the ATO,” Elvy continued.  
 
The consequences of a breach of the auditing standards can lead to disqualification of the auditor by the ATO. Failure of the auditor to identify and report breaches of SIS by the trustee can also increase the risk of an SMSF trustee losing out on tax benefits the SMSF structure can provide.  
 
The ATO is expected to audit up to 4,000 of the 30,000 SMSFs from the 05-06 financial year. More than half a million Australians have a SMSF and the number of funds increases at a rate of 1,600 per month.  
 
In addition to the CD, the Institute is holding comprehensive one-day seminars in each state in October for SMSF auditors to be updated on the latest legislative and regulatory changes, and on issues involved in the financial and audit reports, auditors’ obligations, compliance audits and recent ATO activities. For more information call the Institute on 1300 137 322.