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Changes Impacting SMSF Audits

The Changes Impacting SMSF Audits You Need To Know For FY22

Several changes were made to Superannuation from 1 July 2021 which may impact the audit of your SMSF clients this financial year.

SMSF auditors and those in the financial services industry would do well to familiarise themselves with some of the most recent changes impacting the industry for FY22 reporting. We will cover some of these below.

Non-concessional contributions and the bring-forward rule

One of the biggest changes to the superannuation space came with the increasing of superannuation contribution caps.

Pre-taxation (concessional) contributions are now capped at $27,500.

After-tax (non-concessional) contributions are now capped at $110,000.

For SMSF auditors, changes to the non-concessional contributions cap may play a major role come EOFY.

Super fund balance on 30 June 2021Non-concessional contributions cap (1st year)Bring-forward period
Less than $1.48 million$330,0003 years
$1.48 million to less than $1.59 million$220,0002 years
$1.59 million to less than $1.7 million$110,000No bring-forward period, general non-concessional contributions cap applies.
$1.7 million or moreNilN/A

Source: ATO2.gov.au

Under the non-concessional contribution cap bring-forward rule, the amount a member who was under 65 at the start of the year may contribute has been lifted from $300,000 to $330,000. 

Further, from 1 July 2021 a persons’ non-concessional cap threshold will be nil if their total super balance on 30 June 2021 was $1.7 million due to the indexation of the general transfer balance cap.

Clients will not be able to make additional non-concessional contributions in FY22 during their bring-forward period if they have already triggered the bring-forward rule, for example.

Impacts of 6-member SMSFs

The maximum number of members to form part of a SMSF and small APRA funds increase from four to six as of 1 July 2021. While the majority (90%) of SMSFs have one or two members, this increase may significantly impact family-based funds management.

Those with more than two children and new spouses may benefit from this change, without excluding family members and dependents from a share of the nest egg. Further, increasing the number of members typically means an increase to cash flow and therefore the growth and investment strategy opportunities of the fund.

Auditors should communicate the potential cost benefit of restructuring membership to 6 individuals, as the division of audit fees may result in decreasing cost-per-membership for the group. Decision-making may also be impacted by these changes and may require the support of auditors for streamlining.

Further, auditors with clients that took advantage of this expansion in FY22 may need to ensure deed amendments around the number of members are made, as well as other administrative actions.

COVID-19 support for SMSF trustees

Due to the economic impacts of the COVID-19 pandemic, the Australian Taxation Office (ATO) provided financial support throughout the previous years (FY20 and FY21) to SMSF trustees impacted in a multitude of ways.

While some relief measurements have been put on pause, the ATO extend its financial support into FY22 in the following areas:

1. SMSF residency relief – If a trustee is stranded outside of Australia due to COVID-19 restrictions, the ATO will continue to not apply compliance resources to determine whether the funds meet the residency test.

2. Rental relief – Compliance action will not be taken against the fund if relief is offered on commercial terms (having regard to State and Territory COVID-19 support measures), and proper documentation of the arrangement is kept.

3. Loan repayment relief – Compliance action will not be taken against the fund if loan repayment relief is provided by a SMSF to a related or unrelated party due to impacts of COVID-19 (and offered on commercial terms with proper documentation).

4. In-house asset relief – Compliance action will not be taken against the fund if they have not executed a written plan to reduce market value of in-house assets by 5% due to financial impacts of COVID-19.

Auditors of SMSF clients may want to ensure compliance with these above areas, including that relief is not being provided for categories that the trustee longer qualifies for.

Changes to the SMSF Annual Return

Auditors must review the financial statements of SMSF clients and provide a SMSF audit report to trustees by the day before the SMSF is required to lodge its SMSF Annual Return with the ATO.

The SMSF Annual Return will now capture the details of the auditing service-provider preparing accounts for said fund. The change to this annual report has come out of a necessity to better support the ATO in determining which firms are conducting in-house audits, as well as helping to track compliance with the restructured code and APESB independence guide.

The ATO has determined that firms that provide both accounting and auditing work for SMSF clients fall into this category of “in-house audits” and may only do so in limited circumstances. The ATO will include this new reporting requirement as part of the SMSF annual return for income year 2022.

As part of the auditor independence issues for providing “in-house audits”, auditors must keep in mind that the ATO expects the following on an auditor’s file:

●  “Evidence that the auditor was satisfied the firm did not assume any management responsibilities for the SMSF,

●  Evidence that the trustee had the relevant skills, experience, and knowledge to take responsibility for the preparation of the financial statements such as:

  •   Copies of trustee coded transactions which the firm used to post to the general ledger, and/or
  •   Client approved entries to the trial balance.”

Retirement of eSAT

The auditing program SMSF Auditors have long used, eSAT, has been decommissioned in Early March 2022.

This means that this EOFY, audit service providers will no longer be able to use eSAT to lodge new or amended Auditor Contravention Reports (ACRs) or Audit Complete Advice’s (ACAs). Auditors will be limited to only accessing your history through the eSAT platform as it is saved to your device.

Auditors will do well to begin the transition to the ATO’s Online services if not already done, for SMSF client financial reporting as soon as possible so they can better familiarise themselves with new systems for submitting ACRs and ACAs. 


The myriad of changes impacting SMSF Auditing for FY22 represent the growing number of regulatory shifts that have transformed the way accounting and audit firms operate. Regulatory body ASIC (Australian Securities and Investments Commission) also provides up-to-date details on your ongoing obligations as a SMSF auditor. But it’s no secret that keeping up with the complexities of superannuation and SMSF bookkeeping can be overwhelming. 

If your firm has developed a reputation for high-quality service but you’re unsure you’ll be able to meet the Australian Auditing Standards this financial year, it may be worth reaching out to the National Audits Group for expert financial advice and succession planning.With extensive and diverse experience within our team, we can work side-by-side with your firm to support your clients and assist you in the transition away from audit services. For more information around the future of your auditing services, please read our guide.

Gansen Pappiah CA
SMSF Audit Client Liaison Manager

National Audits Group
More than just auditors
T 1300 734 707
M 0420 667 574

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