Self managed super funds (SMSF) could lose significant value if their audits are not properly conducted, an independent superannuation specialist has said.
"Some SMSFs are in danger of losing hundreds of thousands of dollars simply because their auditor doesn't properly understand the [SMSF] legislation," CJ Baker and Associates principal of strategic advisers and chartered accountants Carolyn Baker said.
A large number of SMSFs have already lost considerable value due to the economic downturn, which is why having an auditor who doesn't understand legislation can impact the value of an SMSF even further.
"I am aware of some mistakes being made that have cost the value of a fund a further 50 per cent, which is money these retirees or potential retirees simply can not afford to lose," Baker said.
"Australia now has almost 750,000 members of SMSFs and its growth is spurning a number of associated business services that offer assistance in the management of these funds.
"Unfortunately many of these services, particularly audits, have been created with an opportunistic view rather than to serve in the best interests of the client."
Engaging an auditor is not only a legal obligation, but finding the right one is just as important to retain as much of the value of the fund as possible, according to Baker.
The ATO is committed to an ongoing audit compliance program on SMSFs that have not engaged an independent auditor, she said.
