SMSF Audits Well Solved: What Excellence Really Means
On Friday, 24 October 2025, I was honoured to receive two national awards at the SMSF Adviser Awards — SMSF Auditor of the Year and the Excellence Award (Individual).
While deeply humbling, these awards are not about one person. They reflect the collective commitment of the Saul SMSF team, our partners, and the accounting and advisory professionals who place their trust in us every day.
At Saul SMSF, our guiding phrase — “SMSF Audits Well Solved” — captures far more than technical excellence. It defines the way we think, work, and lead.
Well Solved Means Proactive, Not Reactive
For us, audit quality is not just about compliance — it’s about foresight.
Our partners often say that we “identify potential issues before they become significant”, helping prevent breaches and giving trustees confidence that their fund is on the right path
True independence means more than ticking boxes; it means standing beside our clients with honesty, clarity and purpose — even when the answers are complex.
Well Solved Means Partnership and Trust
For over a decade, our relationships have been built on collaboration.
As Stewart shared:
“David and his team have always been professional, supportive with any technical issues faced, and look to assist with resolutions. I personally rely on David a lot to explain any potential grey areas, so there are no surprises.”
We see ourselves as an extension of our partners’ teams — helping them deliver confidence, not complications, to their clients.
Well Solved Means Innovation with Integrity
Excellence in SMSF auditing is evolving. As Jonah noted:
“The Saul SMSF team has combined deep audit proficiency with technological innovation, bringing efficient, scalable and highly accurate audit solutions to their partners across Australia.”
Our continued investment in platforms such as SMSF IQ and integrated dashboards reflects a simple belief — technology should serve people, not replace them. Automation should enhance transparency, not diminish care.
Well Solved Means Humanity in Every Detail
Garvin described our approach best:
“David is willing to personally meet with stakeholders, clearly articulate the issues, and navigate challenges with professionalism and empathy… This readiness to address sensitive matters directly, while maintaining transparent and respectful communication, is a hallmark of the Saul SMSF approach.”
And beyond our profession, we are proud to support causes such as Taking Paediatrics Abroad, Kathryn, wrote:
“Saul SMSF’s generosity is inspiring and energising for our small charity, strongly affirming their ethics and values.”
Excellence, after all, means using our strengths to lift others.
The Road Ahead
As we look to the future, “SMSF Audits Well Solved” remains more than our tagline — it is our promise.
- A promise to our partners that we will continue to deliver independence with integrity.
- A promise to our industry that we will keep raising the standard of professional excellence.
- And a promise to ourselves that we will never stop learning, questioning or improving.
As the SMSF landscape continues to evolve, Saul SMSF is leaning into the future — embracing innovation, strengthening collaboration and showing the way forward for what truly independent, technology-driven, human-centred SMSF auditing can be.
To every client, partner and colleague who walks this journey with us — thank you.
Together, we are proving that when SMSF audits are well solved, everyone’s future is stronger.
Deposit Bonds & SMSFs — A Hot Market, A Cold Compliance Shock
By David Saul
CEO & Managing Director, Saul SMSF
Independent SMSF Auditors – “SMSF Audits Well Solved”
The New Trend Emerging in SMSF Property Purchases
Australia’s property market remains one of the most competitive in the world.
With scarcity driving prices higher, we’re now seeing SMSF trustees turn to deposit bonds — a creative way to secure a property today and settle later under a Limited Recourse Borrowing Arrangement (LRBA).
At Saul SMSF, we’ve begun seeing this strategy appear in audits — and while it may seem innovative, it’s also fraught with compliance risk under the Superannuation Industry (Supervision) Act 1993 (“SIS Act”) and Regulations.
Before any trustee signs on the dotted line, they need to know exactly what they’re getting into.
What Is a Deposit Bond?
A deposit bond is not cash — it’s a guarantee from a bank or insurer that promises to pay the vendor (usually 5–10 per cent of the property price) if the buyer fails to complete the purchase.
It’s a temporary substitute for a cash deposit — ideal when liquidity is pending or rollovers are in transit.
For SMSFs, that can sound like a neat solution.
In practice, it’s a compliance minefield.
Why It Matters Under the SIS Act
Sections 67, 67A and 67B of the SIS Act strictly regulate SMSF borrowing.
They allow trustees to borrow only under a Limited Recourse Borrowing Arrangement — and prohibit the fund from giving any charge or security over its assets.
So if a deposit bond:
- Is secured by fund assets, or
- Involves a member’s personal guarantee that exposes fund assets,
then the SMSF may have breached the borrowing provisions — triggering an audit qualification and a reportable contravention to the ATO.
This is not a minor technical breach — it’s a serious compliance failure that can jeopardise the fund’s concessional tax status.
Common Real-World Scenarios
1️⃣ Liquidity Lag
The fund signs a contract while waiting for rollovers to arrive.
The trustee uses a deposit bond to hold the property until settlement.
✅ Acceptable only if the bond is unsecured and expires at settlement.
❌ Non-compliant if it’s backed by fund assets or personal guarantees.
2️⃣ Member-Provided Bond
Members personally obtain the bond, then plan to have the SMSF reimburse the premium.
This can amount to a contribution, loan, or related-party transaction, depending on the facts — each with its own compliance pitfalls.
3️⃣ Lender Refusal
Some LRBA lenders reject deposit bonds altogether, treating them as “paper deposits”.
If funding falls through, the SMSF risks being contractually bound without the means to settle.
Best Practice for Trustees and Advisers
If trustees insist on using a deposit bond, the following safeguards are non-negotiable:
- Structure it properly
The bond must be issued to the bare trustee (holding trust) or SMSF trustee — never secured by fund assets. - Get lender approval upfront
Confirm the lender’s acceptance before any contract is exchanged. - Keep the paperwork bulletproof
- Trustee minutes documenting rationale and legal advice.
- Bond certificate confirming no charge or recourse.
- Confirmation that the bond expires at settlement.
- Account for the premium correctly
The premium is a small administrative expense — not an investment.
The fund can pay it only if it doesn’t create security or recourse. - Check investment-strategy alignment
The SMSF’s investment strategy should reflect the temporary use of a bond and liquidity management.
What Auditors Should Look For
Independent auditors must verify:
- The bond agreement and issuer details.
- Evidence that no fund asset was pledged or guaranteed.
- Minutes and resolutions showing trustee understanding.
- Lender consent under the LRBA.
- That all SIS Act requirements are satisfied before settlement.
If any red flags arise — such as personal guarantees, asset pledges, or inconsistent documentation — auditors should consider a Part A or Part B qualification and, if material, report to the ATO.
Why This Matters Now
The use of deposit bonds in SMSFs is being driven by market pressure, not prudence.
Trustees are competing with cash-rich buyers and developers, and want to “hold” an investment property before liquidity lands.
But innovation without compliance discipline leads to unnecessary risk.
The SIS Act doesn’t make exceptions for “hot markets”.
At Saul SMSF, our goal is to protect your brand, support your clients, and ensure every audit is well solved — even in new and evolving scenarios like this.
Final Word — Step Carefully, Seek Advice Early
Deposit bonds can work within an SMSF if structured correctly — but they’re not a shortcut.
Used incorrectly, they breach the core principles of limited recourse borrowing and put both the fund and its trustees in regulatory danger.
Before proceeding, trustees should:
- Obtain legal and financial advice,
- Ensure no charge is created over SMSF assets, and
- Confirm lender acceptance and audit readiness.
At Saul SMSF, we don’t just audit for compliance — we audit for clarity.
Our role is to help trustees and their advisers step forward with confidence, not caution.
If you’d like guidance on auditing or structuring LRBAs involving deposit bonds, contact Saul SMSF — Australia’s independent SMSF audit specialists.
Website: www.saulsmsf.com.au
Email: info@saulsmsf.com.au
