Before knowing too much about services of SMSF auditors, it is advisable to take a look on audit mechanism. People sometimes ask what is audit or why large scale and medium size auditing companies Australia. Audit and assurance services is basically a mechanism of forming opinion on company’s financial statements. Primarily, elements of financial statements are balance sheet, profit and loss account, cash flow statement, statement of changes in equity and related notes of the financial statements. Auditors form opinion on these financial statements as either they present true or fair view or not. As far as Self-managed superannuation fund is concerned, it is pertinent to consider that SMSF is a kind of fund which is constituted for employees of a company. Just like golden handshake payments or silver jubilee payments, it is retirement benefit plan and at its maturity, employees would be entitled to receive a huge amount for their future. Almost in every state, it is a compulsion for every company to constitute this fund so that rights of employees can be safeguarded. As this formulation of this fund is very important, it is equitably paramount to appoint external auditors. Not merely on account of legal requirement, it cannot be denied that auditors of SMSF can also assist in various areas and due to which, overall management and functionality of a fund would be improved. Some important reasons mentioned below should be cogitated here:
Assurance of accurate accounting data
Fund is a separate legal entity. Most of the cases, management of this fund is also governed by different personnel than management of a company. It means that it might be possible that the draft financial statements might be misstated on account of error or fraud. But if one engages competent external auditors of a recognised firm, note that these qualified professionals always streamline your accounting system and records. Due to it, trustees of this fund can obtain those financial statements which are based on International Accounting Standards and they give true and fair view.
Highlighting of deficiencies
One of the important content of an audit report is ‘reporting on deficiencies in internal control of an entity’. Likewise, if there would be any grey or risky area, there is no need to be worried because SMSF auditors would always report and highlight those deficiencies and also they recommend possible remedies. In this way, overall performance of a business would be improved.
Therefore, it would not be wrong to argue that hiring of SMSF audit services are a very blissful decision for SMSF because such a decision is lot more than coping with legal requirement. Remember that as far as legal and financial services are concerned, one should always have to take care about the independence, objectivity and skillset of auditors.