SMSF Specialist Auditor (SSAud) Exam key terms

An individual registered with ASIC who holds the qualifications and experience required to audit SMSFs, and who is independent of the fund's financial adviser and accountant.

The state of being free from relationships or interests that could compromise objective judgement, including financial, employment, personal or advisory ties to the fund, trustee or adviser.

A statutory report lodged with the regulator when an auditor finds a contravention of superannuation law that is likely to affect members materially or indicates a systemic compliance failure.

A breach of superannuation legislation that meets the statutory threshold for reporting, assessed by reference to materiality to members, financial impact and whether the conduct is systemic or isolated.

Any act or omission by trustees or fund officers that fails to meet the requirements of superannuation law, trust deed provisions or regulatory guidance, whether or not it is reportable.

The governing document establishing the fund, setting out trustee powers, member entitlements, investment rules and amendment procedures; auditors test whether fund activity falls within its terms.

The requirement that a fund be maintained solely for providing retirement benefits to members or their dependants, or for death benefits, and for no other purpose.

An investment in a related party or related trust of the fund, subject to a statutory cap on the proportion of fund assets it may represent, with limited exceptions.

A person or entity connected to the fund, including members, trustees, their relatives, business partners and entities they control or that control them, triggering stricter investment rules.

The requirement that acquisitions and disposals between a fund and a related party occur at market value, supported by contemporaneous independent evidence of that value.

Documentation such as independent appraisals, valuations or arm's-length sale records that substantiates the price used for a transaction reported in the fund's financial statements.

A three-level framework ranking valuation inputs by observability, from quoted prices in active markets through to unobservable inputs, used to classify and disclose asset measurements.

The process of determining the fair value of assets without quoted market prices, typically requiring valuation models, comparable transactions and assessment of key assumptions.

The total value of members' interests in the fund at a point in time, comprising accumulation account balances plus any defined benefit entitlements payable under the trust deed.

The amount credited to an individual member's account, representing their beneficial interest in the fund and forming the basis for benefit payments and reporting.

A member benefit that must be retained in the superannuation system until a condition of release is met, restricting the trustee's ability to pay it out early.

A specified event, such as reaching preservation age and retiring, permanent incapacity or terminal illness, that permits a member to access preserved benefits.

A lump sum or income stream paid from the fund to a member or dependant, subject to preservation rules, tax treatment and correct calculation of the entitlement.

The legislated annual minimum amount that must be paid from an account-based pension, calculated as a percentage of the account balance based on the member's age.

A certificate provided by a qualified actuary stating the proportion of the fund's income that is exempt from tax because it relates to current pension liabilities.

Income earned by fund assets supporting retirement-phase pensions that is exempt from tax, calculated using the proportionate method or segregated assets approach.

A pool of fund assets identified and held solely to support pension liabilities, allowing income from those assets to be treated as exempt current pension income.

The legislated limit on concessional or non-concessional contributions a member may make in a financial year, with excess contributions attracting additional tax or directions.

A contribution to superannuation taxed at the fund level at the concessional rate, including employer contributions and personal contributions claimed as a tax deduction.

A contribution exceeding the applicable cap, which may be subject to extra tax, released from the fund, or retained with an election, depending on contribution type.

A structure allowing an SMSF to borrow to acquire an asset held in a separate trust, where the lender's recourse is limited to that asset if the arrangement defaults.

The trust holding the asset acquired under a limited recourse borrowing arrangement, where the trustee's only duty is to hold the asset until the borrowing is repaid.

The implicit claims management makes about transactions and balances, covering existence, rights and obligations, completeness, valuation and presentation, which the auditor tests.

The information gathered through inspection, observation, enquiry, confirmation and recalculation that supports the auditor's opinion on the fund's financial report and compliance.

The threshold at which omissions or misstatements could influence decisions of users of the financial report, applied in both audit planning and breach reporting judgements.

The written agreement setting out the scope, responsibilities, fees and reporting obligations of the auditor, including the duty to report contraventions to the regulator.

An independence threat arising when the auditor evaluates work they previously performed, such as preparing the fund's accounts before auditing them.

A written statement from the trustees confirming their responsibilities and the completeness and accuracy of information provided to the auditor, dated near the audit report.

An opinion stating that, except for a specific matter, the financial report presents fairly the fund's position, used when a misstatement or limitation is material but not pervasive.

An amount set aside within the fund to meet future pension liabilities, which the auditor assesses for appropriate measurement, disclosure and consistency with actuarial advice.

The documented plan required of trustees covering investment objectives, risk, diversification, liquidity and valuation of assets, which the auditor reviews for currency and implementation.