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I am actually auditing a fund for the 2016 financial year. The fund was wound up (as per tax return) but no Deed of Winding up or Minutes to wind up the fund were prepared. The fund had only about $200 in bank account and no other asset. I may prepare a disclaimer of opinion report for part A (because the trustees do not have the bank account statements for the period 01/01/2016 - 30/06/2016). However, could you give me your opinion on how to you qualify Part B? What section have been breached?
Thank you very much in advance.
In relation to missing bank statements the SIS Act section you are looking for is S35AE - trustees are required to keep documents supporting transactions for at least 5 years after to occurrence of said transactions.
Thank you for your opinion and guidance.
Jean Rey
Hi Jean
Firstly, different auditors may have different views however I would accept as auditor if there was no deed of wind up or wind up minutes if:
1) You are able to get a copy of the signed ITR (annual return) that states that it is a final return.
2) All the assets have been disposed of and benefits paid to members or rolled over to another Fund (or Funds).
3) The requirements of the Trust Deed re windup have been followed.
Given you concerns I would suggest that in the trustee representation letter you get the members / trustees to state that they agree with the wind up of the Fund.
In relation to breaches of Part B there may be a breach of Section 35AE that requires accounting records to be kept for 5 years. Accounting records are required to be kept that enable financial statements and annual returns to be prepared. If bank statements are not available for a period that the bank account was open then this would be a breach of Section 35AE as records have not been kept as is required.
As there has been a breach of SIS you will need to consider if this should be reported in the audit contravention report (ACR).
Thanks
SMSF AAA