SMSF audit checklist: what your auditor will ask for

Around 650,000 self-managed funds hold roughly a trillion dollars, and every single one of them must be audited by an ASIC-approved independent auditor, every single year, before the annual return can be lodged. As a firm that both administers funds and sells audit capacity to other accountants, we see the process from both chairs — and the difference between a five-day audit and a five-week one is almost never the fund. It’s the file.

Here is the checklist, in the order an auditor actually works.

The permanent file — the fund’s identity

These don’t change often, but the auditor needs current versions on file: the trust deed and every amendment (a fund still operating under a 2004 deed with a 2019 pension is a finding waiting to happen); the trustee structure — consents, ATO trustee declarations signed within 21 days of appointment, and for corporate trustees the company’s details matching the fund’s records; the election to be regulated for new funds; and each member’s death benefit nominations, if made, valid against the deed.

The financial year’s evidence

Bank statements for every fund account, covering the full year. Not screenshots, not summaries — statements. The auditor traces contributions in, pension payments out, and everything between. A fund whose money touched a personal account during the year should flag it early with the story and the paper, because the auditor will find it.

Investment reports: broker statements or registry holdings for shares, wrap/platform annual tax statements for managed investments, and executed contracts for anything bought or sold during the year.

Market valuations at 30 June for every asset. This is the perennial sticking point. Listed shares value themselves; everything else needs objective support — for property, evidence supporting current market value each year (a licensed valuation periodically, with comparable-sales appraisals between); for unlisted units or private company shares, financials of the underlying entity and a defensible valuation method; for collectables, valuation plus the storage and insurance evidence the rules demand. “Same as last year” is not a valuation.

The structures that attract attention

Property held directly: title search showing the fund (or bare trustee) as owner, lease agreements at market rent, agent statements — and if a related party is the tenant, the evidence that it’s business real property on arm’s-length terms.

Limited recourse borrowing arrangements: bare trust deed, loan agreement, repayment history, and for related-party loans, terms matching the ATO’s safe harbour (or a benchmarking file that justifies them). LRBA paperwork assembled at audit time rather than at purchase time is the single most expensive category of query we see.

Related-party dealings generally: in-house assets within the 5% limit, acquisitions from members limited to the permitted categories, and every transaction at arm’s length. The auditor isn’t being difficult — these are precisely the rules the audit exists to test.

The paperwork the fund signed

Signed financial statements and member statements, trustee minutes for the year’s decisions (pension commencements, asset purchases, the annual review of strategy), and the investment strategy itself — current, covering diversification, liquidity, and the required consideration of insurance for members. A strategy that says “the trustee will invest in a range of assets” is a template, not a strategy, and auditors read them now.

For pension-phase funds: pension establishment documents, evidence minimum payments were actually made, and the actuarial certificate where one is required for claiming exempt current pension income.

Make it boring — the annual rhythm

Funds that sail through audits do one thing differently: they treat the checklist as a July habit, not an audit response. Statements export in a morning; the valuation file updates once a year; minutes get signed when decisions happen. Our SMSF administration service runs funds on Class and BGL with data feeds precisely so the file builds itself through the year — and when the auditor is us, accounting firms send their funds with this same checklist attached, which is exactly why the turnaround is days rather than weeks.

Questions we get about this

General information only — it doesn’t consider your circumstances and isn’t financial product advice. Get advice on your own position before acting; that’s literally what we’re for.