ATO puts SMSF auditors on notice over missing audit files

"It supports your conclusions across several Superannuation Industry (Supervision) Act 1993 (SISA) requirements and underpins the independent auditor's report," it said.

Recent ATO reviews have shown that trustee representation letters (TRLs) are often missing from audit files, left unsigned or undated, incomplete, or signed after audit completion.

"These issues are procedural and preventable. Without a compliant TRL, you may not have enough evidence to support your conclusions on trustee compliance obligations," the Tax Office said.

"Trustees or directors of the corporate trustee must sign and date the TRL before you complete the audit. Do not sign the IAR until you obtain and retain a complete TRL as part of your audit evidence."

The ATO said the trustee representation letter contains written representations from the trustee about the financial report under ASA 580 and the compliance engagement under ASAE 3100.

"In most cases, you cannot treat the TRL as sufficient and appropriate audit evidence on its own. You should obtain other evidence you can reasonably access and evaluate the TRL against that evidence," it said.

In some cases, the ATO said the TRL can be used on its own as sufficient and appropriate audit evidence to verify compliance with certain trustee record-keeping and retention requirements listed in the IAR.

"These include maintaining accounting records for 5 years, retaining the trustee declaration, and keeping trustee meeting minutes, trustee change and consent records, and member reports for 10 years. Section 103 of the SISA makes failure to keep trustee meeting minutes for 10 years a reportable contravention for ACR purposes," it said.

"Where you do not obtain a compliant TRL, you may need to qualify the IAR and lodge an Auditor Contravention Report (ACR) if the reporting criteria apply."

The ATO stressed that the quality and completeness of the TRL contribute directly to the ATO's assessment of audit quality.

"Missing or deficient TRLs remain a common issue in matters referred to ASIC," it said.

"Before finalising your audit, confirm the TRL is complete, appropriately signed and dated, and retained on file. Taking this step reduces avoidable qualifications and supports audit quality."