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Hi fellow auditors,
I am auditing a fund that holds 75k in cash in a safety deposit box.
Any creative ideas on how to verify this asset is the funds? I figured I can at least get an invoice for the deposit box, but how to verify that anything in it belongs to the fund is a bit more complicated.
I will also check if there are other assets held in the box.
Any other thought on how to treat this and qualification issues would be appreciated.
Thanks,
Clare
Hi Clare
I assume you are referring to Australian $ cash and not collectable bank notes. I also assume that the cash amount is a material asset of the Fund.
I have not come across a SMSF holding "cash" before but if I was the auditor I would be concerned as it would be hard to audit if the members had personal access to the cash during the year being audited.
From a financial audit my view would be that you would need to issue a financial qualification unless you sighted / verified the cash held. I would also request a declaration from the trustees that the Fund is the owner of the cash.
In relation to the compliance audit you would need to consider:
1) Section 62 - sole purpose test.
2) Section 65 - loan money / financial assistance to members.
3) Reg 4.09 - investment strategy.
You could consider making reference to the cash being held in the audit contravention report (ACR) in the professional judgement (additional information) part of the ACR. I would also raise my concerns in the annual management letter to the trustees.
If other members have a view as to how they would approach the audit of cash please let the forum know.
Thanks
SMSF AAA