Yes, I did an ACR. The real estate combined gross worth of $2.5m, being 90% of gross asset. So it is material and I am comfortable with the evidence, except for record keeping compliance. Furthermore, the trustee holds a PhD in financial planning and is a practicing financial planner. He should know better. It is the trustee behaviour that troubles me.

Hi Stephen

In relation to your auditor responsibility if you have qualified and lodged an ACR re the 2019/20 year then in my view there is a requirement to qualify and lodge an ACR re the 2020/21 or 2021/22 years if you believe the contravention can be rectified.

The ACR instructions give guidance at:

www.ato.gov.au

Work out how to complete an Auditor/actuary contravention report (NAT 11239) including reporting criteria and examples.

The ACR instructions state:

"Complete reporting requires auditors to report contraventions in the year they occur and in all following years that the contravention remains unrectified."

An example from the ACR instructions is below. This supports that if you were of the view that the contravention cannot be rectified then there is no requirement to report the contravention in a later year.

"Example: an existing contravention that was previously reported but cannot be rectified

Gillian is the SMSF auditor for the Smith SMSF. In the 2019–20 financial year audit, Gillian identified that minutes of trustee meetings had not been kept. Gillian reported the section 103 contravention in the 2019–20 ACR. Since then the trustees have retained all minutes of meetings.

Gillian is auditing the 2020–21 year. She knows there is a contravention of section 103 because, even though the trustees kept the minutes of meetings for 2020–21, they have not retained minutes of meetings for the last 10 years.

Because this contravention cannot be rectified and it was previously reported in the 2019–20 ACR, it does not have to be reported again."

If other forum members have a view please let the forum know.

Thanks

SMSF AAA