SMSF Association Media Release
A recent Administrative Appeals Tribunal (AAT) decision, which highlighted the importance of contemporaneous documentation and commercial reasoning, provides the perfect backdrop for the SMSF Association’s SMSF Audit Day being held on 20 September 2023.
The one-day virtual program, has been designed with the SMSF auditor’s perspective in mind, focusing on the importance of SMSF trustees and auditors collecting and retaining appropriate evidence.
Throughout the day leading industry experts will explain how SMSF auditors can navigate the scrutiny of the Australian Tax Office (ATO) when it comes to executing investment strategies, valuing fund assets, and dealing with related parties.
SMSF Association CEO Peter Burgess says: “This AAT case exhibited all the hallmarks of a non-arm’s length transaction. Notably, the fund had received a substantial amount of income from a related unit trust and the relevant parties were not dealing with each other on arm’s length terms.
“However, the evidence presented was pivotal in overturning the ATO’s decision and serves as a resounding reminder that SMSF advisers, accountants and auditors need to be on their game when structuring and auditing related party arrangements – every facet of the arrangement needs to be on commercial arm’s length terms and be commercially justified.”
“In today’s regulatory environment, it is important to recognise that SMSF auditors are required to strike a balance between upholding Australian Auditing Standards, fulfilling their obligations to SMSF trustees, meeting ATO and ASIC expectations whilst effectively managing their relationships with accountants.”
The importance of nurturing a solid accountant auditor relationship will feature as a session at the SMSF Audit Day, alongside a session delving into the role that new technology can play in enhancing the SMSF audit process.
Burgess concludes: “We know that SMSF professionals are continually confronted with complex arrangements, particularly when dealing with related parties and that the incidence of related-party disputes is on the rise.
“The focus on this issue, along with the SMSF Audit Day’s overarching theme of diligent evidence, will assist SMSF auditors to stay abreast of current and emerging issues to help mitigate the risk of litigation.”
Register here for SMSF Audit Day.