23rd August 2023 | Audit
In the realm of self-managed super funds (SMSFs), maintaining compliance is paramount, especially when it comes to the potential charges over fund assets. As part of the annual fund audit process, SMSF auditors are responsible for ensuring that fund assets remain untangled from encumbrances. Recent compliance cases have highlighted the significance of this task and the potential consequences of its neglect.
Auditors are being strongly recommended or urged to consistently and carefully gather evidence every year. This evidence-gathering process is intended to confirm or verify that trustees (individuals or entities responsible for managing a fund) have not imposed any fees or charges on the assets held within the fund.
In essence, auditors need to gather proof on a regular basis to ensure that the trustees are not taking any unauthorized or inappropriate fees from the funds they manage. This is important for maintaining transparency, accountability, and the integrity of the funds.
This assurance can be obtained through written confirmation from trustees, as well as a thorough examination of critical resources:
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Property Title Verification: For actual property holdings, auditors must rigorously inspect property titles to identify any encumbrances. This examination is crucial to prevent any complications arising from unauthorised charges on the property.
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Personal Property Securities Register Review: Auditors should scrutinise all SMSF assets by consulting the Personal Property Securities Register. This step ensures a comprehensive check for any interests registered against these assets by external parties.
Failure to gather proper audit evidence has surfaced in compliance cases over the past year.
Auditors conducting assessments on funds that include property assets should take extra care to gather and maintain appropriate evidence affirming the fund’s compliance with Regulation 13.14 of the SISR. This diligence is vital to safeguarding the fund’s integrity and trustees’ interests.
SMSF auditors are critical in safeguarding the financial health of self-managed super funds. Ensuring that fund assets remain free from charges is a pivotal aspect of this role. By meticulously following the outlined steps and maintaining rigorous compliance, auditors can contribute to the stability and success of these funds while avoiding potential regulatory pitfalls.
Contact our trusted Auditor today. Email: info@Ax3.com.au
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