THE AUDITORS INSTITUTE | FORUM

Archived Forums

When you become a member of The Auditors Institute, you immediately gain access to expertise, advocacy for your profession and peace of mind.

Ask a question in our members-only forum or use the search function to find prior technical discussions on your topic. You can expect a response within 24-48hrs.

Want to become a Member?

Join Now

Already a Member?

Disclaimer

The forum is made available by The Auditors Institute Ltd for the benefit of it’s members only, and its primary purpose is to facilitate education, training, and discussion between members. The information and answers provided within the forum are of a general nature and do not consider any specific circumstances, objectives, financial situation or needs related to the matter/s raised. The responses should not be construed as financial advice, and each Member should seek their own professional advice before making any decisions. The Auditors Institute Ltd and its representatives are not responsible for any actions taken based on the information provided in the forum.

To test this feature, visit your live site.

Jul 24, 2022

Investment in a single company

in SMSF Technical Forum

Hi all

I am auditing a fund that at June 30 2021 (established 2019) has the majority of its investment not just in listed shares, but in one specific company. Whilst this company pays excellent dividends it is in the mining sector and far from "blue chip."

Of $360,000 gross assets $320,000 is in this company, the rest is cash. Whilst this is a very dangerous way to invest member benefits (have drafted strongly worded management letter already) does it actually breach any requirements? Is it a qualification/contravention for a fund to do this?

This is a high litigation risk for me unless I make it very obvious how risky this strategy is, so suggestions in that regard also welcome.

I do not believe the trustees have changed investments for the 2022 year.

Thanks very much

3 answers0 replies

Comments (3)

Michael K

Jul 27, 2022

An auditor of a SMSF is prohibited from giving advice on investments (unless they are also financial advisors.) In my view an auditor who follows the ATO line and advising a fund to diversify would be giving financial advice. No win situation.