How to conduct the financial audit of an SMSF
You must conduct your financial audit in accordance with the Australian Auditing Standards (ASAs)External Link issued by the Auditing and Assurance Standards Board.
When conducting the financial audit of an SMSF, (Part A of the audit report), you should:
- prepare and document the audit plan in writing, detailing the approach taken
- identify the nature, timing and extent of audit procedures used to address the risk that financial statements are materially misstated
- gather appropriate evidence to support assertions for material account balances and transactions in signed financial statements, including evidence that
- assets are valued at market value
- any income derived or expenses incurred by the fund are on an arm's length basis
- conduct testing of the assertions made in the signed financial reports about the
- existence of assets, entitlements and liabilities
- occurrence of transactions
- completeness of transactions, events and assets being recorded
- ownership, rights and obligations the SMSF has for assets, entitlements and liabilities
- accuracy and valuation of data amounts recorded
- classification of relevant events to correct accounts
- review the fund's tax calculation and allocation of any tax expense or benefit to the member's accounts, including checking whether the fund has
- correctly classified income (for example, correctly reported income as ordinary, statutory, exempt current pension income, arm's length or non-arm's length income)
- incurred any deductions claimed
- any imputation credits, carried forward losses and other offsets attributable to the fund
- correctly classified the tax status of contributions
- complied with regulatory laws that may otherwise impact their ability to claim concessional tax treatment
- document your conclusions, opinions and judgments based on the evidence obtained with audit working papers that allow another auditor who has had no previous involvement with the audit to understand the work performed and the opinion reached
- form an opinion about the fair presentation of the fund's financial report based on your evidence gathered and checks performed
- report your opinion in the approved Self-managed super fund independent auditor's report (IAR) (NAT 1146).