I had this once and there were disputes over the treatment of funds and who loaned what to where under Section 65, I was the accountant in fact now that I think about it. As one of the Trustees was hostile I ended up ceasing the engagement as I was not going to be able to work with them on this.

I think you could finish this audit qualifying under 35B and maybe Part A given the finanicals could be impacted as aresult of the breach, subseuqent fines and being made non comlying?

We are only auditing a set of financials to give an opinion on them are we not? If only one trustee is willing to sign you can ask for both to sign (maybe in writing directly to the non complying party) then after 14 days qualify under this and generally not signing and thats the audit opinion. If the person who did not sign wants to go to court you just say this is what I was presented, I sought signed paperwork, I did not hear back.

I recently experience this. The accountant spoke to the ATO. I would not sign the audit with only one signature as it does not comply. Both trustees must sign. I wrote a letter to the trustees outlining the seriousness of the offence which was outlined by the ato as the trustee failing in his duty as trustee plus a lot of other things they said and fines could be involved. The trustee who wanted to sign went to court to get permission to sign on one signature. The court advised it was not within their jurisdiction and referred her to the ato. She contacted the ato with the letters from me as the auditor and the accountants letters to the other trustee. The ato finally gave her written consent to sign the reports on behalf of the super fund without the signature of the other trustee. Then I signed off on the audit.

Hi Jan

This is an issue that does unfortunately continue to occur.

My view is that different auditors may approach this differently and some may be reluctant to sign an audit report if the required trustees have not signed the financials due to a perceived higher risk as a result.

In my view an auditor should be able to sign the audit report with just 1 trustee signing (even though they will still see it as a higher risk audit).

The auditor should qualify their audit report in relation to section 35B of SIS in that only 1 of 2 trustees has signed the accounts.

In the Fund ITR the tax agent should show yes to Part B qualification & No to has it been rectified.

The auditor should write to the trustees and advise the trustees of the breach.

The auditor does not have to issue an Auditor Contravention Report (ACR) re section 35B of SIS as it is not a reportable section. (refer below extract)

If other forum members have a view as to how they would approach this please let the forum know.

Thanks

SMSF AAA