An annual audit is a mandatory part of running a self-managed super fund. While the process is independent, how smoothly your SMSF audit runs depends largely on the quality of your records and the accuracy of your financial reporting.
Preparing properly for your SMSF audit helps avoid delays, reduces back-and-forth with the auditor, and ensures your fund meets its compliance obligations with minimal disruption.
In short:
- Every SMSF must be independently audited each year.
- Most audit delays arise from missing documents or incorrect reporting.
- Well-prepared SMSF financial statements and complete records are critical.
- Engaging support helps streamline the audit process.
What Is an SMSF Audit?
An SMSF audit is an independent review of your fund’s financial statements and compliance with superannuation law. It is conducted by an approved SMSF auditor and must be completed before the SMSF annual return can be lodged.
The audit has two key components:
- Financial audit – reviewing the accuracy of the accounts
- Compliance audit – assessing whether the fund has complied with superannuation rules
What SMSF Auditors Review
During the audit, the auditor will typically examine:
- SMSF financial statements
- Bank statements and transaction records
- Investment holdings and valuations
- Contribution and pension records
- Related-party transactions
- Trust deed and trustee details
Providing complete and accurate information upfront significantly reduces audit queries.
Common Reasons SMSF Audits Are Delayed
Audit delays are usually avoidable. The most common causes include:
Missing or Incomplete Documentation
Auditors commonly request bank statements, investment confirmations, distribution statements and pension documentation. When these records are incomplete or missing, follow-up queries are almost inevitable.
Errors in Accounting or Classifications
Errors in contributions, pensions or investment reporting often lead to additional audit questions, requests for amended accounts, or delays in finalising the audit. Many of these issues arise earlier in the year and only become apparent during the audit review.
Unresolved Compliance Issues
Auditors must report certain breaches to the ATO.
Common compliance issues include related-party transactions, breaches of in-house asset limits, incorrect pension payments, or arrangements that are not conducted on arm’s-length terms.
Addressing issues early reduces the risk of reportable contraventions.
How to Prepare for Your SMSF Audit
Keep Records Organised Throughout the Year
Maintaining up-to-date records makes audit preparation far easier than trying to reconstruct information after year end.
Review Financial Statements Before Audit
Trustees should review their SMSF financial statements at a high level to confirm balances appear reasonable, major transactions are reflected correctly, and any significant year-on-year changes are explained. Raising questions early helps avoid last-minute corrections.
Ensure Pension and Contribution Records Are Complete
Accurate documentation for contributions, pension commencements, and pension payments or commutations is essential for both audit and tax reporting.
Why Professional SMSF Support Makes a Difference
Preparing for an audit is significantly easier when your fund’s reporting is handled correctly from the outset.
Specialist SMSF accountants help ensure transactions are recorded accurately throughout the year, financial statements align with audit requirements, documentation is complete and audit-ready, and potential issues are identified before the audit begins.
This reduces audit friction and helps ensure timely lodgement of the SMSF tax return.
Final Thoughts
An SMSF audit is a routine part of compliance, but the outcome largely depends on preparation. Clear records, accurate reporting, and early review help ensure the audit process runs smoothly and without unnecessary delays.
Trustees who take a proactive approach to audit preparation are better placed to meet their obligations and maintain confidence in their fund’s compliance, year after year.
SMSF Audit FAQs
When does an SMSF audit take place?
An SMSF audit is completed after the end of the financial year, once the fund’s financial statements have been prepared. The audit must be finalised before the SMSF annual return can be lodged with the ATO.
In practice, this means the audit typically occurs alongside the annual accounting and tax return preparation process.
Can an SMSF audit be delayed?
Yes. Audit delays most commonly occur due to missing information, incorrect accounting treatment, or unresolved compliance issues. Delays can also arise where investment data or pension records are incomplete.
Good record keeping and the assistance of a SMSF specialist accountant in preparing the accounts can significantly reduce the risk of audit delays.
Do trustees deal directly with the SMSF auditor?
In most cases, communication with the SMSF auditor is managed by the fund’s accountant. This helps streamline the process and ensures audit requests are handled efficiently.
Trustees may be asked to provide clarification or additional documents where required, particularly for compliance-related matters.
Disclaimer: This article contains general information only and does not take into account your personal objectives, financial situation, or needs. It is not a substitute for financial, taxation, or legal advice. While care has been taken to ensure the information is accurate at the time of publication, superannuation and tax laws are complex, can change, and apply differently depending on individual circumstances. SMSFs are subject to strict compliance requirements, and mistakes can result in penalties or additional tax. You should seek advice from a suitably qualified and registered professional before acting on this information.
