I have over 20 years of audit experience gained in a ‘big-4’ and a mid-tier firm and have run other independent SMSF audit practices. I'm passionate about the SMSF sector and enjoy the diversity and challenges of heading up a specialist SMSF audit practice.
I'm currently working with our clients to ensure their administration/accounting work links closely aligns with the compliance requirements of SMSF's, thereby enabling an efficient audit process for all parties.
Are there any common myths you would recommend advisers dispel when working with trustees?
I would say the most important myth for SMSF trustees is not presume what they are signing is correct. All parties should take the time to read the actual documents, ensuring they are consistent and not breaching any superannuation rules. The documentation in an SMSF is critical, and sufficient time should be taken to read and understand the contents to ensure what trustees are signing off is accurate.
We often see templated investment strategies that are conflicting. For example, at the commencement of the strategy, the fund has a conservative investor profile but allows a significant allocation of shares in the asset allocation area. In some cases, we find the minutes don't exactly comply with the requirements of the superannuation legislation, especially with regards to retirement declarations, and preservation rules.
Your topic at the upcoming Superannuation conference in November has the exciting title ‘War Stories of an SMSF Auditor’. Is there a particular war story that stands out for you from the last 12 months?
The simple ones can have massive implications, examples are where some trustees are starting to use their super funds as ATM's. Quite often we find a super fund bank account linked to a member's ATM card. Trustees are then incorrectly withdrawing funds from their superannuation balances. If these mistakes do happen it is important, they are corrected promptly and ensure that it does not happen again.
We also see several cases of minimum pensions not paid in a retirement fund.
One of the more complex scenarios is where related party unit trusts can get into trouble by incorrectly borrowing thereby making the total value of the unit trust an in house asset. The only corrective action is the fund removing its investment in the unit trust.
In light of recent changes and reforms, do you have any best practice advice for fellow practitioners that may assist them to get through the coming year?
The vast number of changes means that practitioners will require to maintain a lot more information to track to funds compliance. Keeping good records will be more important than ever. There should be detailed discussions, with file notes, regarding member's Total Superannuation Balances. When taking over an SMSF from another provider, you will need to seek out a lot more information regarding prior year's contributions, and balances. Keep up to date with ATO's communications especially with regards the ATO's reporting requirements in the new reforms.
You can hear more from Ben at the 3rd Annual Superannuation Essentials Conference, being held on Tuesday 14 and Wednesday 15 November at the Stamford Plaza Adelaide.