The annual audit requirement of self-managed superannuation funds (SMSFs) will be changed to a three-yearly requirement for SMSFs with a history of good record keeping and compliance. This includes SMSF trustees that have a history of three consecutive years of clear audit reports and timely lodgements of the fund’s annual returns. Also proposed from a Treasury discussion paper is to introduce a “key event” audit for SMSFs.
This measure will commence on 1 July 2019. The Treasury has asked for further consultation with stakeholders to ensure a smooth implementation of this measure.
The government has released a consultation paper on its 2018/19 Budget measure to change the annual audit requirement to a three-yearly requirement from 1 July 2019 for self-managed superannuation funds (SMSFs) with a history of good record-keeping and compliance. The paper seeks views on eligibility criteria, key events which may require more frequent auditing and possible transitional arrangements.
Under the measure, audits conducted for SMSFs on a three-yearly audit cycle will cover all of the three preceding years, maintaining integrity within the SMSF sector. SMSFs that do not meet the eligibility criteria will not be eligible for a three-yearly audit cycle and will continue to be annually audited.
Eligibility for the measure will be limited in two ways:
- good recording-keeping and compliance: SMSFs will have to meet eligibility criteria of timely submission of a SMSF annual returns (SAR) and three consecutive years of clear audit reports to move from an annual audit cycle to a three-yearly audit cycle, and
- key events: A SMSF on a three-yearly audit cycle will be audited every year in which a key event occurs, with such audits covering all years since the previous audit.
It is proposed that eligibility for a three-yearly audit be based on self-assessment by SMSF trustees. However, if the ATO becomes aware that a SMSF trustee has incorrectly assessed their eligibility for a three-yearly audit cycle, has failed to submit a SAR in a timely manner or has failed to procure an audit in a year of a key event, the ATO will notify the trustee that an audit is required and consider further action if necessary.
…to find out more about your SMSFs and the eligibility criteria, please do not hesitate to contact us on (02) 8318 1545