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SMSF Audit - whats involved

Discussion in 'Superannuation, SMSF & Personal Insurance' started by crab, 24th Apr, 2012.

  1. crab

    crab New Member

    20th Apr, 2012
    Newcastle, NSW
    What might seem to be a stupid question:

    Is the audit all paper based? Is there any inspection of physical property?

    Audit covers things like:
    business real property is leased at arms length etc.
    transactions relating to the SMSF are all done correctly.

    does not include:
    property inspection on how the industrial property is used by the tenant (related party).

  2. Superman

    Superman Well-Known Member

    6th Nov, 2007
    Gold Coast, QLD
    It would be very rare for a SMSF auditor to inspect a property.

    They would however check the lease agreement, obtain assurance that it is leased at market rates (especially where leased to a related party) and also do some googlng of the address to see if the business at the location matches the entity leasing the premises on the lease agreement.

    They would also ensure that the income physically received by the SMSF matches the lease.

    The auditor also gets the trustee(s) to sign off on a representation letter to the auditor confirming they are not undertaking anything fraudulent with their SMSF.

    I have noticed an increase in audit activity by the ATO around SMSFs that are leasing commercial property to related businesses / related parties. Always ensure you keep all your records complete and up to date.

    SM :D