SMSF compliance guide
SMSF audit: what it covers, who can do it, and when
By easySMSF, SMSF Specialist Team · Updated
Every self-managed super fund in Australia has to be audited each financial year by an independent approved SMSF auditor — no exceptions, even for a fund that held nothing but cash. This guide explains what the auditor actually examines, the independence rules that decide who is allowed to sign off, the evidence you need ready, and what happens when something does not comply.
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Two audits in one engagement
The annual SMSF audit is often spoken about as a single event, but it is really two separate opinions delivered together. The financial audit asks whether the fund's statements fairly present its position at 30 June — whether the assets exist, whether the fund actually owns them, and whether they are carried at market value. The compliance audit asks a different question entirely: did the fund operate within the Superannuation Industry (Supervision) Act and Regulations for the whole year. A fund can have immaculate financial statements and still fail the compliance side.
Independence is the part trustees most often misunderstand. An approved SMSF auditor holds an SMSF auditor number issued by ASIC, and that registration comes with independence obligations that were tightened materially following the restructured APES 110 code. In practice, the person or firm that prepared the fund's financial statements cannot also audit them, and neither can a trustee, a member, or a close relative. This is why a fixed-fee administrator quoting an 'audit included' price should still be sending the file to a genuinely separate auditor — the fee arrangement does not change the independence test.
Timing is legislated rather than negotiable. Trustees must appoint the auditor no later than 45 days before the fund's annual return is due, and the auditor must be given the accounts and every piece of supporting evidence they request. The return cannot be finalised until the audit report is issued, so a fund that leaves valuation evidence or trustee minutes until the deadline is the fund that ends up lodging late.
Where the auditor identifies a contravention, they raise it with the trustees first. If it meets the ATO's reporting criteria — by size, by type, or because it remains unrectified — the auditor must file an auditor contravention report. That report is not automatically a penalty. The ATO's response depends heavily on whether the breach was rectified, whether it was self-identified, and whether there is a pattern. Fixing an issue before lodgement is consistently the cheapest outcome available to a trustee.
The practical lesson from year after year of audit files is that the audit itself is rarely the bottleneck. Missing market valuation support for property or unlisted assets, holdings registered in a member's personal name, a lease with a related party that was never documented, and pension payments that fell short of the minimum are what turn a two-week audit into a three-month one. Good administration during the year is what makes the audit uneventful.
- Compulsory every year for every SMSF, including funds that made no transactions
- Must be performed by an approved SMSF auditor with an ASIC-issued SMSF auditor number
- The auditor cannot be a trustee, a member, a relative, or the preparer of the accounts
- Appoint the auditor at least 45 days before the annual return is due
- Assets must be carried at market value at 30 June, with evidence the auditor can test
- Reportable contraventions go to the ATO via an auditor contravention report
- Rectifying a breach before lodgement is the single biggest lever on the outcome
- At easySMSF the independent audit is inside the fixed annual fee — no separate invoice
The SMSF audit process, step by step
The same sequence runs every year. Funds that keep evidence as they go move through it in a fortnight.
Close off the financial year
After 30 June the fund's transactions for the year are reconciled — bank feeds, broker data, contributions, rollovers, pension payments and expenses — so the accounts reflect what actually happened rather than what was expected.
Prepare the financial statements
An operating statement, statement of financial position and member statements are prepared, with every asset carried at its 30 June market value. Accurate valuations are the single most common source of audit queries.
Assemble the audit evidence
The auditor works from source documents, not assertions: bank and broker statements, title searches or rates notices for property, valuation evidence, the trust deed, trustee minutes and the fund's investment strategy.
Appoint an independent approved SMSF auditor
Trustees must appoint an auditor registered with ASIC at least 45 days before the annual return is due. The auditor must be independent of whoever prepared the accounts — that separation is a legal requirement, not a preference.
The financial audit
The auditor forms an opinion on whether the financial statements fairly present the fund's position, testing existence, ownership and valuation of assets and the completeness of income and contributions.
The compliance audit
The auditor separately tests compliance with the SIS Act and Regulations — sole purpose, in-house asset limits, arm's length dealings, loans to members, contribution acceptance, minimum pension payments and condition-of-release checks.
Audit report, then the annual return
The auditor issues the independent auditor's report and, where a reportable breach exists, an auditor contravention report to the ATO. The SMSF annual return cannot be finalised until the audit is complete.
What the auditor asks for, by asset type
Have these ready and the audit is administrative. Leave them until asked and the audit is where your year gets stuck.
| Area | Evidence the auditor needs | Common issue |
|---|---|---|
| Cash and term deposits | Bank statements or a data feed covering the full year, plus 30 June balance confirmation | Accounts not in the fund's name, or personal money mixed with fund money |
| Listed shares and ETFs | Broker holding statements and transaction history at 30 June | Holdings registered to a member personally rather than to the fund |
| Direct property | Title search, rates notice, lease agreement, and market valuation evidence | Related-party occupancy without a commercial lease at market rent |
| Unlisted or private assets | Signed financial statements of the entity and independent valuation support | In-house asset limit breaches and unsupported valuations |
| Crypto assets | Exchange or platform statements showing fund ownership and 30 June value | Assets held in a personal wallet cannot be shown to belong to the fund |
| Contributions and rollovers | Contribution records, member allocations, rollover benefit statements | Contributions accepted after a cap is exceeded or without a valid TFN |
| Pension payments | Payment records against the calculated minimum, plus pension documentation | Minimum pension not met, which can cost the fund its earnings tax exemption |
Crypto is a common sticking point: we support crypto holdings only where they are held through Interactive Brokers, so ownership and 30 June values can be evidenced from a data feed. Private wallets, hardware wallets and external exchanges are not supported.
Why audit independence matters to you
An audit signed by someone with a stake in the accounts is worth very little to a trustee, and the ATO treats independence failures seriously — an auditor can be referred to ASIC and the fund can be left needing a fresh audit at its own cost. We prepare your accounts and a separate approved SMSF auditor reviews them. You get one fixed fee, and the sign-off still comes from someone with no interest in the answer.
Frequently asked questions
Audit included, not billed separately
One fixed annual fee covers your accounts, member statements and the independent audit.
General advice warning
Figures shown are illustrative only and based on the inputs and assumptions you provide. They are general information, not personal financial product advice. Consider your objectives, financial situation and needs, and seek personal advice from a licensed financial adviser before acting. easySMSF does not hold an Australian Financial Services Licence (AFSL).