Due to new financial services legislation taking effect from 1st July 2016, an accountant giving financial advice to trustees of a Self managed superannuation fund (SMSF) must be licensed to provide this advice and must act in the best interests of the client (Including set up of an SMSF, as they are now categorised as a financial product) and give priority to interests of the trustees when providing personal financial advice.

RG 175 (RG 175.214) provides the basic policy principals which guides the administration of "best interests duty and related obligations". ASIC expects professionals and advisers to provide higher quality of advice as compared to the general standard of advice previously being provided under s945A and 945B of corporations act.

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New Paragraph added on Independence in Engagement Letter

We have made a change to our standard engagement letter which SMSF auditors may use on our online audit program. This change is to further protect auditors for any potential liability for being blamed for providing any financial advice to trustees of the fund.

The paragraph which deals with independence is being changed as below. 

We confirm that, to the best of our knowledge and belief, the engagement team meets the current independence requirements of APES 110 Code of Ethics for Professional Accountants (as amended), issued by the Accounting Professional & Ethical Standards Board in relation to the statutory audit engagement (an audit required by legislation) of the fund. Hence no member of the engagement team can provide any accounting, legal or financial advice. Our engagement as an auditor of the fund is limited to obligations imposed on us by SIS Act (e.g. section 129).

In conducting our financial audit and compliance engagement, should we become aware that we have contravened these independence requirements, we shall notify you on a timely basis. However, please note we are not engaged to provide any financial advice and none will be provided, including an opinion, if a self managed superannuation fund is appropriate for trustees or they have taken responsibility of where member funds are invested or trustees understand their legal and taxation obligations as trustees of the fund.

Our engagement does not include to form an opinion and advice trustees on the following:

• the fund has sufficient funds to establish a SMSF or continue to manage a fund;
• investment restriction on underlying assets;
• rollover from another fund to a SMSF or transferring assets to SMSF;
• level and type of contributions by each member of the fund;
• acquiring or disposing any particular financial product or class of financial product;
• initial and ongoing costs of administering a fund;
• if they are prepared and able to allocate the time and skill needed to administer a fund;
• if they have adequate insurance cover for all members of the fund;
• limited government protections in the event of fraud or theft or dispute;
• limited access to superannuation complaints tribunal; or
• advantages and disadvantages of a SMSF.

Should any SMSF auditor have any comments, please do not hesitate to contact us.

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