2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer...
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Transcript of 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer...
![Page 1: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/1.jpg)
2011 SMSF National Conference
Session 12A:
How to get the most from your AuditorShirley Schaefer
BDO
![Page 2: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/2.jpg)
2011 SMSF National Conference
How to get the most from your Auditor• Auditor Relationships & Independence• Audit documentation• Auditor Contravention Reports• Rectification of Contraventions
![Page 3: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/3.jpg)
2011 SMSF National Conference
Auditor Relationships & Independence• APES 110 “Code of Ethics for Professional Accountants”• Auditors to be independent from their clients• Independence of mind & in appearance• Identification of threats to independence
“threat that the auditor may inappropriately issue an unqualified audit opinion”
![Page 4: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/4.jpg)
2011 SMSF National Conference
Auditor Relationships & Independence• Not an adversorial role• Get to know your auditor
– Their systems & procedures– Their documentation requirements (checklists)– How to resolve queries/conflicts
• Use them as a technical resource
![Page 5: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/5.jpg)
2011 SMSF National Conference
Auditor Relationships & Independence• Auditor communications
– Engagement letters– Trustee representation letters– Reporting to trustees at the conclusion of the audit– Reporting to the ATO
![Page 6: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/6.jpg)
2011 SMSF National Conference
Audit Documentation• AUASB “Australian Auditing Standards”
– The auditor “shall”
• ASA “Audit Documentation”– Evidence from third parties– Original vs copies– Physical vs electronic– prepare audit documentation that can be understood by an
experienced auditor
![Page 7: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/7.jpg)
2011 SMSF National Conference
Audit Documentation• Sufficient appropriate evidence to support the auditor’s
conclusion– Bank Statements– Evidence of asset acquisition & valuation– Evidence of income & expenses– Contracts/leases– Private investments– Exotic/collectible assets– Contributions– Benefits & pensions
![Page 8: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/8.jpg)
2011 SMSF National Conference
Audit Documentation• First year audit documentation
– Trust deed– Member/trustee declarations, applications & nominations– ATO registration– Minutes of meeting– Investment Strategies– Prior year financial statements & audit report (signed)– Prior year auditor correspondence
![Page 9: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/9.jpg)
2011 SMSF National Conference
Auditor Contravention Reports• Compulsory ATO Reporting
• Does the fund meet the definition of a SMSF (s.17A)?– If No – compulsory reporting
• Is the fund < 15 months old at year end?– If yes, compulsory reporting of ALL contraventions
![Page 10: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/10.jpg)
2011 SMSF National Conference
Auditor Contravention Reports• Compulsory ATO Reporting
• Has the trustee previously received advice of a contravention that they have breached again?– If yes – compulsory reporting
• Is there an identified contravention from a previous year that has not been rectified at the time the audit is being conducted?– If yes – compulsory reporting
![Page 11: 2011 SMSF National Conference Session 12A: How to get the most from your Auditor Shirley Schaefer BDO.](https://reader036.fdocuments.in/reader036/viewer/2022082917/5513f3525503463a298b611d/html5/thumbnails/11.jpg)
2011 SMSF National Conference
Auditor Contravention Reports• Compulsory ATO Reporting
• Did the trustee fail to meet a statutory time period by more than 14 days?– s.35C(2) – provision of documents to auditors within 14 days of a
written request– s.67 – borrowing for more than 7 days to settle securities
transactions or 90 days for surcharge or benefit payments– s.82 – preparation of a written in-house-asset plan before the end
of the next financial year
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2011 SMSF National Conference
Auditor Contravention Reports• Compulsory ATO Reporting
• Did the trustee fail to meet a statutory time period by more than 14 days?– s.104A – new trustees must sign a declaration within 21 days of
appointment– s.126K – immediate notification to the ATO is required where a
trustee becomes a disqualified person– reg 7.04 – contributions that must be returned to members
required within 30 days
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2011 SMSF National Conference
Auditor Contravention Reports• Compulsory ATO Reporting
• Is the total value of contraventions (ALL) > 5% of the total value of the fund’s assets?– If yes – compulsory reporting
• Is the total value of contraventions (ALL) > $30,000?– If yes – compulsory reporting
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2011 SMSF National Conference
Rectification of Contraventions• Advise your client• Discuss a rectification plan• Have the client rectify the contravention ASAP
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2011 SMSF National Conference
Rectification of Contraventions• Contact the auditor immediately• Provide evidence to prove the rectification
– Bank statements– Signed agreements– In house asset plans– Correspondence
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2011 SMSF National Conference
Rectification of Contraventions• Provision of financial assistance
– Pay interest to the fund
• In house assets– Preparation of an IHA Plan
• Trustee forms/declarations not completed– Get declarations signed
• Contravention may not be avoidable