This week in review - our Blog

Pinocchio? The Power of Words: Accounting Misrepresentations

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Accounting may be about numbers, however the “meaning” behind those numbers is of vital importance when it comes to protecting SMSF retirement savings.
 
Inaccurate wording – or indeed blatant misrepresentations - can lead Trustees into losing their superannuation savings.
 
Recently we wrote about a court case against an SMSF auditor where a fund’s investments were recorded as “Mortgage Investments” in the SMSF’s financials when in fact the fund’s assets were unsecured loans. The SMSF accountant’s mis-use of the word “mortgage investments” implied that the fund’s assets were secured when in fact they were not.
 
The Trustees believed their investments were recoverable, when in fact they had given an unsecured loan to a business which later went into receivership.
 
Quantifying the value of a quality audit
In SMSF accounting and administration, both the words and the numbers work together to protect and empower Trustees. There is real value in accountants using the right words…  and also in having an auditor who checks that you have!
 
Since the Royal Commission there has been a renewed focus on quality and integrity in the SMSF industry. We are proud to say that at SaulSMSF we have always, both pre and post Royal Commission, rallied under the banner of quality and integrity . We focus on the value that a quality audit adds to the reputation of your firm and to the protection of your clients’ retirement savings.