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Proposed reporting requirement to place ‘undue pressure’ on auditors


The Treasury’s proposed amendment to require SMSFs to finalise accounts 45 days before the due date of the return will place additional pressure on auditors in determining whether there has been any backdating or untoward activity, according to a technical expert.

By Miranda Brownlee 12 minute read

As part of a range of amendments released for consultation, the Treasury recently proposed a regulation which would require the accounts and statements of an SMSF to be prepared at least 45 days before the date they are required to be lodged.

Speaking at the SMSF Virtual Day 2020, Smarter SMSF chief executive Aaron Dunn said this means that where the due date of the SMSF annual return is due 15 May, the preparation of the SMSF accounts would need to be completed by 31 March.

“This specifically looks at the requirements set out under section 35B of the SIS Act. It is an obligation, and it is an area where if it’s not satisfied appropriately or there is a compliance breach, you will see an administrative penalty applied for failure to meet this obligation,” Mr Dunn explained.


Where there is a breach of section 35B, there is an administrative penalty of 10 penalty units, which could mean a penalty of $2,220 each for individual trustees, or $2,220 for directors of a corporate trustee where they are joint and severally liable.

“I believe this places real undue pressure on an auditor to actually be satisfied themselves that this [requirement has been met] and that it has occurred naturally — that there’s been no backdating or untoward activity that’s occurred,” Mr Dunn said.

Mr Dunn said there could be situations, for example, where the an SMSF practitioner got all the work finished by 30 March but then couldn’t get an appointment with the client until 5 April and then backdates the documents back prior to 1 April because otherwise the auditor has to say that there’s been a breach of s 35B and there would be administrative penalties that apply in that scenario.

“The approach just isn’t right here. The trustees have done nothing wrong here, because they have a due date by which to have completed all those tasks which includes the audit needing to have been done by 15 May, so what is the basis for requiring this to be done earlier?” he questioned.

He also pointed out that there are already prescribed time frames for SMSF auditors.

“For example, trustees must meet requests within 14 days where documentation is required, and then where an auditor has all that information, they have 28 days after having received that information to undertake and complete that audit as well, so there are other dates in there but none of them line up to the 45 days in any event, other than the appointment date of the auditor for the financial year,” he stated.

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Miranda Brownlee

Miranda Brownlee


Miranda Brownlee is the deputy editor of SMSF Adviser, which is the leading source of news, strategy and educational content for professionals working in the SMSF sector.

Since joining the team in 2014, Miranda has been responsible for breaking some of the biggest superannuation stories in Australia, and has reported extensively on technical strategy and legislative updates.
Miranda also has broad business and financial services reporting experience, having written for titles including Investor Daily, ifa and Accountants Daily.

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