Every Self-Managed Super Fund is required by law to be audited each financial year by an approved SMSF auditor registered with ASIC. The audit must be completed before the fund lodges its annual SMSF return with the ATO. No exceptions — even simple funds with no activity in a year must be audited.
What Is an SMSF Audit?
The audit has two components:
1. Financial audit The auditor independently examines the fund’s financial statements for the year and provides an opinion on whether they present a true and fair view. This covers:
- The fund’s balance sheet (assets and liabilities)
- Income and expenses for the year
- Changes in member balances
- Pension payment records (if the fund is paying pensions)
2. Compliance audit The auditor reviews the fund’s compliance with the SIS Act and SIS Regulations. This is separate from the financial audit and covers whether the trustees have operated the fund within the law. The auditor checks:
| Compliance Area | What the Auditor Checks |
|---|---|
| Sole purpose test | Are investments being made for retirement purposes only? |
| Investment strategy | Does a written strategy exist? Does it meet ATO requirements? |
| In-house assets | Is the 5% limit not exceeded? |
| Related-party transactions | Are they at arm’s length and permitted under the law? |
| Separation of assets | Are fund assets held separately from trustee personal assets? |
| Contribution rules | Have contributions been accepted correctly (eligible members, within caps)? |
| Benefit payments | Have payments been made only to members with a condition of release? |
| LRBA compliance | If the fund has borrowed, do arrangements meet the SIS Act requirements? |
| Trustee declaration | Has each trustee signed the NAT 71089 declaration? |
| Record-keeping | Are minutes, valuations, and documents properly maintained? |
Who Can Conduct an SMSF Audit?
SMSF audits must be conducted by an approved SMSF auditor — a person registered with ASIC under the Superannuation Industry (Supervision) Act and the Corporations Act. The auditor must:
- Be independent — not a trustee, related party, or the fund’s accountant (if the accountant prepares the accounts, a different person must audit them)
- Be approved by ASIC
- Rotate for larger funds where required (less common in SMSFs)
Accountants who prepare your fund’s financial statements cannot also audit them. Most SMSF accounting firms either use a separate auditor or refer to an independent SMSF audit firm.
Typical SMSF Audit Costs
SMSF audit fees vary based on fund complexity and the auditor used:
| Fund Complexity | Typical Audit Fee Range |
|---|---|
| Simple fund (cash, ASX shares only) | $300 – $500 |
| Moderate (property, multiple investments) | $500 – $800 |
| Complex (LRBA, crypto, unlisted assets) | $800 – $1,500+ |
Audit fees are separate from accounting and administration fees. When budgeting for SMSF running costs, include both. The total annual cost for a simple fund (accounting + audit + ATO levy) is typically $2,200–$4,500.
The Auditor’s Role If Issues Are Found
If the auditor identifies a potential compliance breach, they have obligations:
- Qualified audit report: If a material breach cannot be resolved, the auditor issues a qualified compliance report
- ATO reporting: Auditors are required to report certain contraventions to the ATO — they cannot simply stay silent if a serious breach is found
- Working with trustees: For minor issues, auditors often raise the matter with trustees during the audit for resolution before finalising the report
Trustees should be cooperative with the auditor’s requests for information. Delays in providing records are the most common cause of audit delays and additional costs.
The Audit Timeline
The audit must be completed before the SMSF annual return is lodged. The standard sequence:
- End of financial year (30 June): Year closes
- July–September: Accountant prepares financial statements and tax position
- September–October: Accountant sends draft accounts and records to auditor
- October–November: Auditor completes audit, issues audit report
- By 28 February (or tax agent lodgement date): Annual return lodged with ATO
Many SMSF trustees cause delays by being slow to provide bank statements, share registries, property valuations, and other documentation. Providing complete records to your accountant promptly after 30 June speeds up the entire process.
Annual Valuation Requirements
Auditors require that all fund assets be valued at market value as at 30 June each year. This affects the audit process:
| Asset Type | Valuation Approach |
|---|---|
| ASX shares and ETFs | Market price on ASX at 30 June |
| Managed funds | Unit price provided by the fund manager |
| Listed property trusts | Market price at 30 June |
| Direct property | Formal independent valuation (required at least every 3 years; more frequently if the market has moved materially) |
| Unlisted investments | Based on available market evidence |
| Cryptocurrency | Market price at 30 June from a recognised exchange |
For direct property, the ATO accepts qualified independent valuations. Municipal (council) rates notices are generally not accepted as a substitute for a market valuation.
Frequently Asked Questions
Can I use the same person to do both the accounting and the audit? No — the auditor must be independent from the preparer of the financial statements. Most SMSF accounting firms either have a sister audit firm or refer to an independent SMSF audit service.
What if I miss the audit and lodge the return without it? Lodging an SMSF annual return without a completed audit is a contravention. The ATO may issue a penalty and require the audit to be completed. Do not lodge without the audit.
Our fund had no activity this year — do we still need an audit? Yes. Even if the fund had no contributions, no earnings, and no payments, an annual audit is still mandatory.
Can trustees choose their own auditor? Yes — trustees can select any approved SMSF auditor. Your accountant may recommend one, but the choice is yours. Some online SMSF audit services offer competitive prices for straightforward funds. Check the auditor is registered with ASIC before engaging them.
See also: Self-Managed Super Funds. For further guidance, see the ATO’s SMSF auditing requirements or the ASIC SMSF auditor register. Consult a registered tax agent or SMSF specialist for compliance advice.