SMSF Setup & Admin

Audit (mandatory, annual, and independent)

Every SMSF must be independently audited every year — there are no exceptions, even for a fund that made no investment changes or holds only cash. And it must happen before the return is lodged, because the SAR asks whether the audit was done.

• It must be done by an approved SMSF auditor — ASIC-registered, holding an SMSF auditor number (SAN). Not every accountant qualifies; it's a separate registration with its own qualification, CPD and PI requirements.
• It's a two-part audit: a financial audit (are the statements accurate) and a compliance audit (does the fund meet the SISA/SISR rules).
• Contraventions are reported to the ATO via an Auditor Contravention Report, within 28 days of completing the audit.

Administration (the ongoing recurring work)

This is the accounting and compliance engine that runs all year and culminates in the annual lodgement. It covers:

• Recording the fund's transactions — contributions in, rollovers, investment income (dividends, interest, rent, distributions), fund expenses, and pension or lump-sum payments out.
• Year-end market valuation of every asset — a SISR requirement, and a major audit focus; property, unlisted assets and anything over 10% of fund value especially.
• Preparing the financial statements (operating statement + statement of financial position) and member balance statements.
• Working out the tax position — CGT on investment disposals, exempt current pension income (ECPI), franking credits, the taxable/tax-free components.
• Preparing and lodging the SMSF Annual Return (SAR) — which rolls income tax, regulatory reporting and member contributions into one form.
• TBAR (Transfer Balance Account Report) — from 1 January 2026, all SMSFs must follow a quarterly reporting framework.
• Trustee documentation — investment strategy reviews, minutes and resolutions for significant decisions, pension documentation, actuarial certificate coordination if in pension phase.
• Monitoring contribution caps, pension minimums, and now Division 296 — the extra 15% tax on earnings attributable to balances over $3m, which applies from the 2025–26 income year with the first total-super-balance test at 30 June 2026.
• Appointing the auditor — required at least 45 days before the annual return due date.