Trustees failing to provide requested documentation

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SMSF Audit Technical Issues Series

In this blog series, CaseWare’s SMSF Audit expert and content provider Sharlene Anderson, outlines common technical SMSF issues, and what auditors need to consider for each. This is the sixth and final issue in this series.

Trustees failing to provide requested documentation

Regulation 8.03 of the SIS Regulations requires the auditor to give the audit report to the trustee within 28 days of the trustee providing all documents relevant to the preparation of the audit report.

Section 35C (2) of the SIS Act requires a trustee of an SMSF to give the auditor documents that are relevant to the preparation of the audit report, that are requested by the auditor in writing, within 14 days of the request being made.

Section 35C(2) of the SIS Act is in the compliance scope of Part B of the auditor report. The auditor should consider qualifying the audit report in respect of breaches of the section.
Section 35C(2) is also a reportable section in the auditor contravention report. The auditor contravention reporting criteria require a contravention report to be lodged when a relevant statutory time limit is exceeded by 14 days.

Accordingly, if a trustee takes more than 28 days to provide a relevant document requested in writing by the auditor the auditor is required to lodge a contravention report.

The questions the auditor needs to address before concluding that a breach has occurred include:

  • Was the request for documents a request in writing to the trustee or a more informal request made to the accountant of the fund?
  • If the request was a formal request in writing and sent to the fund accountant do the audit engagement terms with the trustee acknowledge that the accountant’s address is a place of contact for the trustee and does the auditor have any agreement with the accountant confirming they will promptly forward all requests to the trustee?
  • At what point does the auditor accept that no further documentation will be provided and attend to issuing the audit report on the basis of information to hand? If this course is taken the audit report and auditor contravention report should most likely include other financial and compliance qualification as a result of the auditor’s inability to form opinions due to insufficient audit evidence.

Our own process is to informally send a list of review points to the accountant of the fund following the initial audit. After a period of time we will send a follow up request to the accountant.  If documentation has still not been provided we will send a formal request in writing to the trustee of the fund noting they have 14 days from the date of the letter to respond in accordance with section 35C of the SIS Act.