SMSF Auditor Registration and the Regulatory Framework
Who may audit an SMSF
An SMSF must be audited annually by an approved SMSF auditor. Registration is administered by ASIC, and a person cannot act as an SMSF auditor unless registered. Candidates should understand the pathway: holding relevant qualifications, meeting practical experience requirements, satisfying a competency examination, and maintaining continuing professional education. Registration carries conditions, and ASIC can suspend or cancel it for breaches, including failing to lodge annual statements or failing independence requirements.
Independence is a statutory concept
Independence is not merely an ethical aspiration; it is a legal precondition. An auditor is not independent if they are a member, trustee, or employee of the fund, or if a close associate or related entity occupies such a role. The trap in questions is the seemingly minor relationship: a spouse who is a trustee, an auditor who prepared the fund's accounts, or a firm partner who provides administration services. Preparing the financial statements and then auditing them compromises independence even where the numbers are correct.
The auditor's reporting obligations
Beyond the audit report itself, the auditor must notify the trustees of certain contraventions and, in specified serious cases, report to ASIC. Questions often test the distinction between matters reported to trustees and matters reported to the regulator, and the timeframes involved.
Worked rule of thumb
When a question describes any relationship between auditor and fund, apply a single test: could a reasonable person perceive the auditor as free of influence? If the auditor or a close associate benefits from, controls, or is employed by the fund, treat independence as lost. Independence failures are treated as registration matters, not merely audit-quality matters.
Common traps
Watch for answers that assume registration is permanent, that confuse ASIC's role with the ATO's, or that treat independence as satisfied because the auditor disclosed the relationship. Disclosure does not cure a statutory independence breach.