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Sample SMSF Engagement Letter

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					Date



The Trustee(s)

XXX Superannuation Fund

Street

Suburb, State, PCode



Dear Trustee(s),



AUDIT ENGAGEMENT – YEAR ENDED 30th June 2007

Thank you for my appointment as auditor of your Superannuation Fund. As it is necessary to
clarify my role to you, under the Superannuation Industry (Supervision) Act 1993 (the SIS
Act) and Regulations, I wish to set out the detail of my terms of engagement as follows:

1. Audit of Financial Report

In accordance, with section 113 of the Superannuation Industry (Supervision) Act 1993
(SISA), the financial report of a regulated superannuation fund must be audited by an
approved auditor. The auditor must give the trustees an audit report on the financial report in
the approved form within the prescribed time after the year of income to which the financial
report relates.

I direct your attention to the fact that the trustees are responsible for the maintenance of
adequate accounting records and internal controls, the safeguarding of superannuation fund
assets, the selection of accounting policies and the preparation of financial reports and
returns. The trustees are required to keep minutes of meetings, reports and records of
trustee changes for a period of at least 10 years.

My audit will be conducted in accordance with Australian Auditing Standards. Those auditing
standards require that I comply with relevant ethical requirements relating to auditing
engagements and that I plan and perform the audit to obtain reasonable assurance that the
financial report is free of material misstatement.

In forming my opinion on the financial report, I will perform sufficient tests to obtain
reasonable assurance that: the underlying accounting records are reliable and adequate as a
basis for the preparation of financial report; and the financial position / net assets of the fund
at balance date and the results / movements in net assets for the year are properly disclosed
in the financial report.

The work I undertake to form an opinion is permeated by judgment, in particular regarding
the nature, timing and extent of the audit procedures for gathering of audit evidence and
drawing of conclusions based on the audit evidence gathered. Further, there are inherent
limitations in any audit, including the use of testing, the inherent limitations of any internal
control structure, the possibility of collusion to circumvent controls, and the fact that most
audit evidence is persuasive rather than conclusive. As a result, my audit can only provide
reasonable – not absolute – assurance that the financial report is free of material
misstatement.

As you are aware, you are responsible for prevention and detection of irregularities and
fraud. However, I shall endeavour to plan and conduct my audit so that I have a reasonable
expectation of detecting material misstatements in the financial statements or accounting
records arising from irregularities and fraud.

Because of the test nature and other inherent limitations of an audit, together with the
inherent limitations in any system of internal control, there is an unavoidable risk that some
material misstatement, fraud or irregularity may remain undiscovered.

2. Audit of Compliance

As auditor of the fund I am required to express an opinion with regard to the fund’s
compliance with certain provisions of the SIS Act, a summarised explanation of which are
attached. These provisions will be restated in my audit report which will be in the form
approved by the Australian Tax Office (ATO).

3. Report on Significant Matters

In addition to my opinion on the financial report, I will report any material weakness in the
fund’s system of accounting and internal controls, which come to my notice. I will also report
any matter as designated by specific reporting responsibilities and requirements under
Sections 129 and 130 of the SIS Act. This will be in the form of an ‘Audit Management
Letter’ and any prescribed ATO forms.

4. Confidentiality and Quality Control

The conduct of my audit in accordance with Australian Auditing Standards is subject to strict
confidentiality requirements. My audit files may, however, be subject to review as part of the
quality control review program of the Institute of Chartered Accountants in Australia, which
monitors compliance with professional standards. I advise that by signing this letter you
acknowledge that if requested, my audit files relating to this audit may be made available
under this program. Should this occur, I will advise you. The same strict confidentially
requirements apply under this program as apply to me as your auditor.

5. Tax Returns and Financial Advice

This engagement does not include services relating to Tax Returns or Financial Advice which
will be provided by your Accountant or other appointed advisors. Any advice provided at the
conclusion of the audit will be limited to factual information and recommendations with regard
to maintaining fund compliance. I am not licensed to provide financial product advice under
the Corporations Act 2001.

6. Fees & Payment

My fees, which are inclusive of GST, are based on the time spent and the associated risks of
the audit engagement and should be $xxx.

In the unlikely event that I need to increase the quoted fee, following an initial review of your
financial information, I reserve the right to seek your agreement to continue with the audit for
a revised fee.

7. Audit Completion
When I have completed the audit I will provide you with an ‘Audit Management’ letter, a
‘Trustee Representation’ letter (for your signature and return) and a Tax Invoice (for the
agreed audit fees). Upon receipt of the signed ‘Trustee Representation’ letter I will issue the
‘Audit Report’.

I look forward to receiving the required audit information (please refer to the enclosed ‘Fund
Audit Information Checklist’) at least 6 weeks before your annual return is due to ensure the
audit is completed within the prescribed legislated time limits. Please ensure the enclosed
copy letter, which provides your acceptance of the terms of this engagement and
authorisation to undertake the audit is signed and returned via your accountant or directly as
soon as possible. Without this authorisation I am unable to begin the audit.

Should you have any queries with this engagement then please contact your accountant or
me directly.



Yours faithfully



Chartered Accountant (No. xxx)
                                                COPY
                                       Please sign & return to Auditor

                                       Please sign & return to Auditor
Date



The Trustee(s)

XXX Superannuation Fund

Street

Suburb, State, PCode



Dear Trustee(s),



AUDIT ENGAGEMENT – YEAR ENDED 30th June 2007

Thank you for my appointment as auditor of your Superannuation Fund. As it is necessary to
clarify my role to you, under the Superannuation Industry (Supervision) Act 1993 (the SIS
Act) and Regulations, I wish to set out the detail of my terms of engagement as follows:

1. Audit of Financial Report

In accordance, with section 113 of the Superannuation Industry (Supervision) Act 1993
(SISA), the financial report of a regulated superannuation fund must be audited by an
approved auditor. The auditor must give the trustees an audit report on the financial report in
the approved form within the prescribed time after the year of income to which the financial
report relates.

I direct your attention to the fact that the trustees are responsible for the maintenance of
adequate accounting records and internal controls, the safeguarding of superannuation fund
assets, the selection of accounting policies and the preparation of financial reports and
returns. The trustees are required to keep minutes of meetings, reports and records of
trustee changes for a period of at least 10 years.

My audit will be conducted in accordance with Australian Auditing Standards. Those auditing
standards require that I comply with relevant ethical requirements relating to auditing
engagements and that I plan and perform the audit to obtain reasonable assurance that the
financial report is free of material misstatement.

In forming my opinion on the financial report, I will perform sufficient tests to obtain
reasonable assurance that: the underlying accounting records are reliable and adequate as a
basis for the preparation of financial report; and the financial position / net assets of the fund
at balance date and the results / movements in net assets for the year are properly disclosed
in the financial report.

The work I undertake to form an opinion is permeated by judgment, in particular regarding
the nature, timing and extent of the audit procedures for gathering of audit evidence and
drawing of conclusions based on the audit evidence gathered. Further, there are inherent
limitations in any audit, including the use of testing, the inherent limitations of any internal
control structure, the possibility of collusion to circumvent controls, and the fact that most
audit evidence is persuasive rather than conclusive. As a result, my audit can only provide
reasonable – not absolute – assurance that the financial report is free of material
misstatement.

As you are aware, you are responsible for prevention and detection of irregularities and
fraud. However, I shall endeavour to plan and conduct my audit so that I have a reasonable
expectation of detecting material misstatements in the financial statements or accounting
records arising from irregularities and fraud.

Because of the test nature and other inherent limitations of an audit, together with the
inherent limitations in any system of internal control, there is an unavoidable risk that some
material misstatement, fraud or irregularity may remain undiscovered.

2. Audit of Compliance

As auditor of the fund I am required to express an opinion with regard to the fund’s
compliance with certain provisions of the SIS Act, a summarised explanation of which are
attached. These provisions will be restated in my audit report which will be in the form
approved by the Australian Tax Office (ATO).

3. Report on Significant Matters

In addition to my opinion on the financial report, I will report any material weakness in the
fund’s system of accounting and internal controls, which come to my notice. I will also report
any matter as designated by specific reporting responsibilities and requirements under
Sections 129 and 130 of the SIS Act. This will be in the form of an ‘Audit Management
Letter’ and any prescribed ATO forms.

4. Confidentiality and Quality Control

The conduct of my audit in accordance with Australian Auditing Standards is subject to strict
confidentiality requirements. My audit files may, however, be subject to review as part of the
quality control review program of the Institute of Chartered Accountants in Australia, which
monitors compliance with professional standards. I advise that by signing this letter you
acknowledge that if requested, my audit files relating to this audit may be made available
under this program. Should this occur, I will advise you. The same strict confidentially
requirements apply under this program as apply to me as your auditor.

5. Tax Returns and Financial Advice

This engagement does not include services relating to Tax Returns or Financial Advice which
will be provided by your Accountant or other appointed advisors. Any advice provided at the
conclusion of the audit will be limited to factual information and recommendations with regard
to maintaining fund compliance. I am not licensed to provide financial product advice under
the Corporations Act 2001.

6. Fees & Payment

My fees, which are inclusive of GST, are based on the time spent and the associated risks of
the audit engagement and should be $xxx.
In the unlikely event that I need to increase the quoted fee, following an initial review of your
financial information, I reserve the right to seek your agreement to continue with the audit for
a revised fee.

7. Audit Completion

When I have completed the audit I will provide you with an ‘Audit Management’ letter, a
‘Trustee Representation’ letter (for your signature and return) and a Tax Invoice (for the
agreed audit fees). Upon receipt of the signed ‘Trustee Representation’ letter I will issue the
‘Audit Report’.

I look forward to receiving the required audit information (please refer to the enclosed ‘Fund
Audit Information Checklist’) at least 6 weeks before your annual return is due to ensure the
audit is completed within the prescribed legislated time limits. Please ensure the enclosed
copy letter, which provides your acceptance of the terms of this engagement and
authorisation to undertake the audit is signed and returned via your accountant or directly as
soon as possible. Without this authorisation I am unable to begin the audit.

Should you have any queries with this engagement then please contact your accountant or
me directly.



Yours faithfully



Chartered Accountant (No. xxx)



I/We confirm agreement to the above terms and duly authorise (name of auditor) to
undertake the audit of the XXX Superannuation Fund.

				
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