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Mark Baghdassarian

Jun 18, 2021

Signing of the Audit Engagement letter

in SMSF Technical Forum

When auditor and trustee(s) are agreeing to the terms of an audit engagement, I believe that a minimum of two trustees (or, if sole director of a corporate trustee, then one director) must sign an audit engagement letter for that initial audit engagement. Can you confirm this? Is there a resource / standard for this requirement anywhere?

In situations where its not met, which qualifications may be applicable?

2 answers0 replies

Comments (2)

Brian Johnson

Jun 30, 2021

I have a client that has two trustees the member and his daughter. The daughter is in the navy and is not always around. I believe the member (being a single member) undertakes all the decisions and transactions of the SMSF. Because the daughter is not always available I get him to sign documents (other than the accounts) as " Signed for and on behalf of the Trustees of the fund".

THE AUDITORS INSTITUTE

Jun 21, 2021

Hi Mark

Section 35B of SIS requires the financial statements to be signed by at least 2 trustees if there is 2 or more.

In terms of the engagement letter & signing this would be covered by the auditing standards.

Auditing standard ASA 210 "Agreeing the Terms of Audit Engagements" at paragraph 9 states:

"The auditor shall agree the terms of the audit engagement with management or those charged with governance, as appropriate."

It then goes onto state at A22:

"The roles of management and those charged with governance in agreeing the terms of the audit engagement for the entity depend on the governance structure of the entity and relevant law or regulation."

On that basis the audit engagement letter should be signed by at least 2 trustees if there are 2 or more trustees.

I would be interested in other member's views if the engagement letter was not signed by at least 2 trustees (if 2 or more trustees). You could consider raising it as a management letter issue to the trustees.

Thanks

SMSF AAA