Independent Auditor’s Report – for 2011/12 released – new areas of interest

The ATO has released the approved form of the Independent Auditors Report for 2011/12.  

There are two significant changes to the report compared to the previous year’s report: the auditor will now have to expressly consider whether the fund complied with s67A and 67B (limited recourse borrowing arrangements) and Reg 13.18AA (requirement to hold collectibles and personal use assets in accordance with prescribed rules).

Consequently, auditors will, in respect of the 2011/12 financial year audit, need to pay particular attention to limited recourse borrowing arrangements entered into by SMSFs.  The auditor may be concerned to ensure that the arrangement was entered into with the correct parties (the trustee of the SMSF as the borrower, that there is a fully documented loan carrying interest at a market rate with the holding trustee holding title) and, if the debt has been repaid, that the arrangement has been wound up.

A generic version of this Compliance Certificate is now available from the SUPERCentral toolkit.  This certificate has been prepared by SUPERCentral’s lawyers, Townsends Business & Corporate Lawyers, and cross references the issues raised in the Independent Auditor’s Report and also with Appendix 4 of Guidance Statement GS 009 (updated August 2011) issued by the Auditing and Assurance Standards Board.

The Compliance Certificate is provided to assist the auditor in forming its view as to whether the Governing Rules of a fund which is currently on the SUPERCentral system sufficiently satisfy the requirements of the Independent Auditors’ Report and those of Appendix 4 of Guidance Statement GS 009.

If required, the Compliance Certificate can be issued in a signed format in the name of a particular superannuation fund.  A small fee will be charged by the firm for this service.