How to prepare for an SMSF auditor and fill in your SMSF tax return

There are undoubtedly more interesting and rewarding ways to spend your time, but no one said running your own self-managed super fund (SMSF) was going to be easy.

As a trustee of your fund, there are two annual tasks that can’t be avoided. These are your legal compliance requirements to:

• Have your fund audited by an independent, ASIC-approved auditor each year
• Lodge an annual SMSF return to the Australian Taxation Office (ATO).

SMSF auditors conduct both a financial and compliance audit of your fund’s operations as part of their annual auditing process.

Role of the SMSF auditor

The financial audit analyses all the fund’s financial statements, such as its balance sheet, income statement and member statement, based on Australian Auditing Standards. This process ensures that the financial statements that have been signed off by the SMSF trustees represent a fair and accurate position of the fund’s position at the end of the financial year.

The compliance audit checks compliance with the relevant superannuation legislation. This process requires your SMSF auditor to review the transactions and activities within your SMSF against a number of defined sections of superannuation law and regulations.

When both are done, your SMSF auditor must complete an independent auditor’s report document provided by the ATO. This report must then be given to the trustees of the SMSF within 28 days of the auditor receiving all relevant documentation.

If there have been any breaches (contraventions) of the relevant super legislation revealed in the compliance audit, auditors must report them to the ATO within 28 days using an ATO-provided contravention report document.

If you don’t use an accountant to prepare your SMSF financial statements, this article contains tips for:

• Providing your auditor with all the information they need to ensure the process will be as smooth as possible
• Filling in your SMSF tax return.

Preparing SMSF financial statements for your auditor

If you are an SMSF trustee and you’re not using the services of an accountant, you must provide your fund auditor with all relevant documentation for your fund’s accounts and financial transactions for the financial year being audited. The auditor will usually give you a list of the documents you need to submit.

If your auditor requests further information or documentation, you must provide this material within 14 days.

Using software to prepare your SMSF financial statements

Technology is rapidly transforming the daily administration of SMSFs. While preparing your fund’s financial statements can be fiddly and time-consuming, you can make life easier for yourself by using one of the software solutions that are readily available on the market. It’s a good idea to check with your auditor first, because using the same software they do could make the auditing process smoother and cheaper.

SMSF balance sheet