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Dear Sir/Madam,
Could you please help me your ideas as below?
1/ Where do I find information out that show super law whether allow SMSF investment as buy a business (for example restaurant , manufacturing etc )
2/ Assume SMSF‘s Trust Deed allowed, what information & documents that auditor need mention for audit investment in business?
3/ Assume company trustee of SMSF running that business, every year do auditor need check details all of Income, Expenses, Assets…of this company (maybe so much)? Or auditor just check compare the net income of company amount that recorded in Operating Statement of SMSF with the Company’s Profit & Loss Statement
Hi Phuong
A SMSF can invest in a business in different ways.
The ATO has a guide to a SMSF carrying on a business at:
If a SMSF invested in a company that ran a business audit steps would include reviewing / auditing:
1) the Fund's deed.
2) the investment strategy.
3) compliance with sole purpose test.
4) compliance with in-house asset rules.
5) compliance with the loans / financial assistance to member rules.
6) compliance with acquiring assets from related party rules.
7) compliance with arm's length rules.
8) compliance with borrowing rules.
In terms of the financial audit the steps to audit the company will depend on materiality and your risk assessment of the investment.
If the company is a private company you will need to be able to audit the market value the trustees give to this asset and be able to audit any dividends received.
Thanks
SMSF AAA