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Sep 04, 2021

Qualified Opinion on opening balances

in SMSF Technical Forum

I have been picking up few new third party SMSF audits, being a new auditor we put in the following paragraphs on opening balances in the auditor’s report and one of the accountant firms is concerned with the word “qualified opinion”. Should I reword but I want to protect ourselves against any issues with the opening balances which was audited by another auditor. I explained to her that there is no qualified on part A or part B.

Opinion [Qualified Opinion]

I have audited the special purpose financial report of the xxx Super Fund comprising the statement of financial position as at 30th June 2021, and the operating statement, a summary of significant accounting policies and other explanatory notes.

In my opinion, except for the effects on the financial report of the matter/s referred to in the Basis of Qualified Opinion section of my report below the financial report presents fairly in all material respects in accordance with the accounting policies described in the notes to the financial report and the financial position of the fund at 30th June 2021 and the results of its operations for the year then ended.

Basis for Qualified Opinion

My audit has been conducted in accordance with Australian Auditing Standards. My responsibilities under those standards are further described in the Approved SMSF Auditor’s Responsibilities for the Audit of the Financial Report section of this report. I am independent of the SMSF in accordance with the auditor independence requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (including Independence Standards) (the Code) that are relevant to this audit and as required by the Superannuation Industry (Supervision) Regulations 1994 (SISR). I have also fulfilled my other ethical responsibilities in accordance with the Code.

I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my qualified opinion.

Opening balances

With respect to the opening balances reported in the financial report of the fund, which was audited by xxx, per the unqualified audit report dated 29/07/2020, we have not obtained sufficient appropriate audit evidence to form an opinion on the opening balances (comparative financial information).

Thank you for your opinions or comments in advance.

1 comment

Comments (1)

THE AUDITORS INSTITUTE

Sep 06, 2021

Hi Vin

Firstly please make sure you are using the new audit report from 1 July 2021 that can be found at:

www.ato.gov.au

SMSF independent auditor's report

Information on the new version of the self-managed super fund (SMSF) independent auditor's report (IAR) (NAT 11466).

Your basis for qualified opinion also needs to refer to the new "management responsibility" requirements.

I note some auditors always qualify on opening balances if it is their first year they do the audit & some auditors do not.

I note that if this (re opening balances) is the only qualification in the audit report then this does not need to be disclosed as a qualification in the annual return, refer below re the 2021 annual return instructions extract. My view is that you should advise the accountant that such a qualification does not need to be disclosed in the annual return.

Thanks

SMSF AAA

2021 annual return instructions extract:

"Was Part A of the audit report qualified?

SMSF trustees may be penalised for making a false or misleading statement.

Has the auditor qualified Part A: Financial report of the SMSF independent auditor's report?

Print X in the No box.

Yes

Print X in the Yes box.

Answer 'no' if:

the audit report was not qualified, or
the audit report was only qualified in relation to insufficient audit evidence under Auditing Standard ASA 510 Initial Audit Engagements – Opening Balance."