Understanding of legislative and other rUnderstanding of legislative and other requirements

Understanding of legislative and other requirements

4. An approved SMSF auditor must understand all of the following:

(a) the SIS Act and the Superannuation Industry (Supervision) Regulations 1994 (SIS Regulations) as they apply to a self managed superannuation fund (SMSF) and to an approved SMSF auditor;

(b) any auditing standards (ASAs) made by the Auditing and Assurance Standards Board (AUASB) under section 336 of the Corporations Act 2001 (Corporations Act) and related guidance issued by the AUASB, that are applicable to the duties of an approved SMSF auditor under the SIS Act;

(c) any auditing and assurance standards(ASAEs), formulated by the AUASB under section 227B of the Australian Securities and Investments Commission Act 2001 (ASIC Act) and related guidance issued by the AUASB, that are applicable to the duties of an approved SMSF auditor under the SIS Act;

(d) APES 110 Code of Ethics for Professional Accountants (APES 110) issued by the Accounting Professional & Ethical Standards Board Limited in December 2010 as it applies to audit and assurance engagements in relation to SMSFs;

(e) any accounting standards made by the Australian Accounting Standards Board (AASB) under section 334 of the Corporations Act or formulated under section 227 of the ASIC Act, that are applicable to financial reporting in relation to a SMSF.

Note 1: An understanding of the accounting standards includes an understanding of the valuation of assets, tax effect accounting and disclosure of financial information.

Note 2: An understanding of the SIS Act and SIS Regulations as it applies to SMSFs includes an understanding of the provisions relating to all of the following:

(a) contributions;

(b) benefits;

(c) investments; including:

(i) in-house assets;
(ii) loans;
(iii) borrowings;
(iv) investment restrictions;

(d) record keeping;

(e) sole purpose of an SMSF;

(f) trustees;

(i) structure;
(ii) residency;

(g) reporting.