Get Ready for SMSF Audits: What You Need to Know

Setting up an SMSF is a foolproof way of investing in financially-stable retirement days. Investing in an SMSF fund is proven to provide many important benefits which make this fund a powerful economic tool. However, setting up and running an SMSF is not as simple as it might seem to you. There are many rules and obligations set by the Australian Taxation Office (ATO), that you must to comply in order to run an SMSF that is compliant to all the legal requirements.

SMSF Audits

After you set the fund, an important thing to keep on mind for the further running of the fund is that your fund must be audited on an annual basis. Performing annual audits is one of the most important requirements by the taxation office, which means that by not complying to this rule you will certainly be faced with serious penalties.

Annual SMSF audits are performed by qualified and approved auditors. When it comes to setting and running a superannuation fund as well as for the conducting of the annual audits, the role of the auditor is to ensure that the fund is complaint to all of the rules and requirements set by ATO.

With that being said, in order to make sure that your fund meets all the SMSF audit requirements, you need to hire a qualified and approved auditor. This is actually the first step in the process of preparing for an SMSF audit. Also, this is a step that requires a bit of attention because you must make sure that the auditor you’ll hire is licensed and registered with the ASIC (Australian Securities and Investment Commission). Otherwise, hiring an auditor who is not registered in accordance to the strict rules of this organization is a serious pitfall that usually ends in a hefty penalty.

After you hire an auditor and you can with certainty say that your fund is now compliant to all of the SMSF audit requirements, what you need to do next is to prepare the documentation. Some of the most important documents you need to prepare include: documents for loans, paid mortgages, receipts from insurance payouts and for received rent payments as well as documents for investments and bonds. However, keep on mind that this is not a definite type of documents you may need, there might be certain variations and additional requirements, which depend on the specific circumstances under which the SMSF audit is performed.

Goran Nikolov is a content writer of Protista, a website where you can find a lot of interesting lists. He is from Macedonia and has a passion to write lists about everything that surrounds him, especially about sports, health, music, technology and history. Goran loves to play basketball in his free time, enjoys playing on his guitar and sharing his thoughts with others.