I’m not a person who makes big plans for the future. I’m just a simple man that wants to experience life spontaneously day by day (or better yet, I was that man). Freedom and flexibility have always been very important for me. But no matter my nonchalant outlook on life, there are certain responsibilities I’ve had to properly address, like for instance saving up for rainy days and picking the right pension fund.
I think you can already guess I went for the fund that offered me the greatest amount of personal control – the SMSF. As a trustee, I received certain freedom in modifying the fund’s structure and investment strategies, however, this doesn’t mean I had no rules and regulations to keep to. The parts that depended solely on me were easy enough: properly register the fund with ATO, sign a trustee declaration and make an investment strategy. However, there was one certain requirement I needed to outsource – the performing of annual audits.
You can’t just put any person in charge of your SMSF audits. There are licensed SMSF auditors with the knowledge and expertise to examine the accuracy of your financial records and make sure the fund complies with all laws and regulations. Even if you do have the knowledge to undertake this evaluation by yourself, and personally handle the SMSF accounts and tax returns, the government still demands that an independent audit is carried out by a professional.
All approved SMSF auditors are registered with the ASIC, the Australian Securities and Investment Commission. The requirements they need to fulfil include being an Australia resident, have the right education qualifications, certain practical experience and passing the competency exam designed by the ASIC.
Even if during the whole financial year there were no payments, contributions or any other changes in the fund’s assets, you’re still legally required to appoint an auditor. The auditor should be an independent entity, separate from any operations of the fund and not involved in any personal or professional relationship with the trustees.
The trustees must appoint the auditor no later than 45 days before the lodging of the annual return is due. After making an agreement with the auditor, you need to provide him with the necessary documents, such as:
– Documents of any investments and bonds
– Insurance receipts
– Mortgage payments
– Records of any received rent
Keep in mind that trying to hide something from the person auditing your fund is a criminal offence. If they request any additional information or documentation from you, you have the obligation to provide it to them within 14 days of their written request. In case of irregularities, where there is breaching of any of the rules, the auditor would submit the findings to the ASIC and ATO.
The SMSF responsibilities have resulted in making me take life more seriously, and find the joy in providing for my future days.