This week in review - our Blog

Linked SMSF services and legal risk

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Take a fresh look at the pros and cons of full service SMSF firms and alliances

It may appear to SMSF Trustees that having all services - accounting, auditing, administration and investment advice – with the same or closely-related advisory firms is cost-effective and efficient. However, there is an argument that such arrangements place more responsibility on the Trustees themselves to conduct due diligence to ensure compliance.

Recent litigation cases reinforce an important message to Trustees: while SMSF Auditors are obligated to verify asset values in financial statements, the ultimate responsibility for the fund lies in the hands of the Trustees.

Closely linked SMSF services miss an important quality: genuine auditor independence.

The value in independent audit, accounting and adviser services is that each professional serves a single purpose: to give impartial oversight on the fund. This, in turn, results in protection and peace-of-mind for Trustees.

It is in the interests of the Trustees that their Auditor leverages professional judgement and gives independent advice, even if it’s not what they wanted to hear. Ultimately this is what protects the fund and reduces the likelihood of litigation in the event of a breach.

At Saul SMSF we encourage Trustees to embrace the value that comes with real independence.