SMSF Specialist Auditor (SSAud) Exam flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Annual SMSF audit

Every self-managed super fund must undergo an independent audit each income year. The audit must be completed before the fund lodges its annual return with the ATO.

Approved SMSF auditor

A person registered with ASIC who has passed the competency examination and meets continuing education requirements. Only an approved auditor may conduct the SMSF audit.

Auditor Contravention Report

A form used by the approved auditor to notify the ATO of a contravention that is likely to affect the fund's complying status and meets reporting thresholds.

Part A audit report

The section of the SMSF audit report addressing whether the financial statements comply with accounting standards and give a true and fair view.

Part B audit report

The section of the SMSF audit report addressing whether the fund complied with the SIS Act and Regulations throughout the income year.

Management representation letter

A written statement from the trustees confirming their responsibilities and the accuracy of information provided to the auditor. It supports audit evidence.

Sole purpose test

Section 62 of the SIS Act requires the fund to be maintained solely for providing retirement benefits, or benefits on death, disability, or termination of employment.

In-house asset limit

A fund's in-house assets must not exceed 5% of total fund assets, measured at 30 June each year. Excess requires a rectification plan.

Bring-forward rule

Allows a member to make up to three years of non-concessional contributions in one year, subject to their total superannuation balance and cap thresholds.

Transfer balance cap

The maximum amount a member can transfer into retirement phase. Indexation occurs in $100,000 increments based on the general cap.

Division 293 tax

An additional 15% tax on concessional contributions for high-income earners whose income exceeds the threshold, levied on the individual.

Investment strategy

A written plan required of trustees covering diversification, liquidity, and members' circumstances. It must be reviewed regularly and consider the fund's ability to pay benefits.

Concessional contributions

Contributions taxed at 15% in the fund, including employer contributions and salary sacrifice. Caps apply and excess contributions attract additional tax.

AASB 1056

The accounting standard for superannuation entities, specifying presentation and disclosure requirements for financial statements of superannuation funds.

Sufficient appropriate evidence

Evidence must be enough in quantity (sufficiency) and relevant and reliable (appropriateness) to support the auditor's opinion on the financial statements.

Existence assertion

Confirms that recorded investments and assets actually exist at the reporting date. Bank confirmations and registry statements provide strong evidence.

Valuation assertion

Confirms assets are recorded at appropriate market values. The auditor evaluates the reasonableness of the trustee's valuation, especially for unlisted assets.

Materiality

The threshold at which misstatements could influence users' decisions. Set at planning, revised during the audit, and applied to the financial statements.

Bank confirmation

An independent written response from a financial institution verifying cash balances and transactions. It provides highly reliable audit evidence.

Analytical procedures

Evaluations of financial information through comparison with benchmarks, prior periods, or expectations to identify unusual fluctuations requiring further investigation.

Market value

The amount for which an asset could be exchanged between knowledgeable, willing parties in an arm's-length transaction. Trustees determine it and auditors evaluate it.

Related-party acquisition

Purchasing an asset from a member or related party. Generally prohibited unless an exception applies, such as listed securities at market value.

Business real property

Land and buildings used wholly and exclusively in a business. It is excluded from the in-house asset test and may be acquired from related parties at market value.

Unlisted asset valuation

Valuing assets without a market price using techniques such as discounted cash flow, comparable transactions, or net asset value. The auditor assesses reasonableness.

Collectibles

Assets such as artwork, jewellery, and antiques. They must be insured, stored separately, and not used by members or related parties.

Arm's-length terms

Transactions conducted as between independent parties. Related-party dealings must be assessed for arm's-length terms and disclosed appropriately.

APES 110

The Code of Ethics for professional accountants, covering integrity, objectivity, confidentiality, and independence requirements for assurance engagements.

Self-review threat

A threat to independence arising when the auditor reviews work they previously performed, such as preparing the financial statements being audited.

Familiarity threat

A threat to independence arising from close relationships with trustees or members, which may cause the auditor to be too sympathetic to their interests.

Management letter

A communication from the auditor to the trustees reporting significant findings, control weaknesses, and recommendations arising from the audit.

Audit documentation retention

Audit working papers must be retained for at least seven years after the audit report date, supporting the opinion and compliance with standards.

Auditor independence

The auditor must be free of financial, personal, or business relationships with the fund, trustees, and members that could compromise objectivity or professional judgement.