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Can any one suggest where will we find the full information whether an approved SMSF auditor can advice on the investment or not. As far as I understand auditor can not comment on the investment in SMSF. It is the duty of the trustees to do due diligence and take any financial advice before they invest. But if the investment is dangerous can an auditor make comment? Does this constitute financial advice by auditor?
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Hi Rakesh
In terms of the audit report the auditor audits regulation 4.09 that:
"Trustees must formulate, regularly review and give effect to an investment strategy
for the fund".
The ATO gives guidance on investment strategies at:
The ATO states that the auditor's role in relation to a SMSF investment strategy is:
"When conducting the annual audit on your fund, your auditor will check whether your fund has met the investment strategy requirements under the super laws for the relevant financial year. This means they will check that:
your SMSF had an investment strategy in place for the relevant financial year that considered the factors outlined above
your fund’s investments during the relevant financial year were in accordance with that strategy
your strategy had been reviewed at some stage during the relevant financial year.
Where you don’t comply with the investment strategy requirements, your auditor may need to notify us about this by lodging an auditor contravention report (ACR)."
My view is you can comment on the investments in terms of the investment strategy requirements as noted above. This would not be considered to be advice.
I note that many auditors do a completion letter with their audit report that refers to the above noted investment strategy requirements and refer specifically to the website link noted above.
If other members have a view please let the forum know.
Thanks
SMSF AAA