Audit season is now underway. Every SMSF trustee knows an audit is coming each year. Far fewer could explain who is actually doing it, why that person is allowed to, or what happens if the arrangement is not quite right.
That matters more than it sounds. Trustees remain responsible for their fund’s compliance, even where an accountant, administrator or auditor is involved. If the audit relationship is wrong, the consequences can include delayed lodgement, an audit needing to be redone, administrative penalties payable personally by trustees and, in serious cases, the fund itself being made non-complying.
This article explains who is legally allowed to audit an SMSF, what the independence requirement means, what audits commonly cost, and how the audit process runs from appointment through to annual return lodgement. It also covers the narrow Return Not Necessary exception and ASIC’s recent action against auditors who breached independence rules.
For a broader checklist of what auditors review, see the 2025-26 SMSF Audit Checklist. For the standing guide, see the SMSF Audit Guide.
Key Takeaways
- Only an ASIC-registered approved SMSF auditor with a current SMSF Auditor Number can sign your fund’s audit report.
- The auditor must be independent of the person or firm preparing the fund’s financial statements. APES 110 generally prevents the same person or firm from doing both.
- ASIC took action against 28 SMSF auditors in the first half of 2025-26, including disqualifying two auditors specifically for continuing in-house audits after earlier ASIC conditions.
- The ATO’s 2023-24 annual overview reported a median SMSF audit fee of $550 and an average of $651. Complex funds usually cost more.
- The auditor must be appointed at least 45 days before the annual return is due. For many funds lodging through a tax agent, the 2025-26 annual return due date is 15 May 2027, putting the appointment point around 31 March 2027.
- Every operating SMSF must be audited every year, even in a quiet year. The narrow exception is a newly registered fund that never started operating and qualifies for Return Not Necessary.
Who is allowed to audit an SMSF?
An SMSF audit must be carried out by an approved SMSF auditor registered with ASIC. This is a specific registration, not a general description of accounting experience.
An approved SMSF auditor holds a current SMSF Auditor Number, often shortened to SAN. That number must be included in the SMSF annual return and appear on the independent auditor’s report. Trustees can check an auditor’s current status through ASIC’s Professional Registers Search.
This rules out people trustees sometimes assume are qualified. A general accountant, bookkeeper, tax agent or company auditor who does not hold the specific SMSF auditor registration cannot sign off on an SMSF audit.
The SAN system exists because the SMSF audit is a regulatory gatekeeping function. The auditor gives an independent opinion on two things: whether the fund’s financial statements are properly supported, and whether the fund complied with superannuation law during the year. Without a valid audit, the SMSF annual return cannot be lodged properly.
Trustees do not need to become audit experts, but they should know the name and SAN of the person signing the report. If the auditor has been arranged entirely through an accountant or administrator, ask for those details before the audit starts.
SMSF auditor independence rules
The auditor must be independent of the fund and independent of the accounting work they are auditing.
The key professional standard is APES 110. The ATO explains the independence requirement in its auditor independence guidance. In practical terms, the same person or firm generally cannot prepare an SMSF’s financial statements and then audit those same statements.
There is a narrow carve-out. Independence may still be possible where the accounting work is genuinely routine or mechanical and the trustee retains responsibility for the substantive decisions. For example, purely processing transactions the trustee has already coded and approved may be different from preparing accounts that involve judgement.
Trustees should not assume this exception applies just because the fund looks simple. Most SMSF accounts involve judgement somewhere: asset values, contribution classification, pension records, reserve movements, investment strategy alignment or related-party transactions.
Why independence matters
If the same person prepares the accounts and then audits them, they are effectively reviewing their own work. That undermines the purpose of the audit.
This is not only a professional standards issue for auditors. It can affect trustees too. If the ATO or ASIC later concludes the audit was not independent, the audit may need to be revisited or redone. That can delay annual return lodgement and create extra costs. In more serious cases, a fund with unresolved compliance problems can attract ATO action.
For trustees, the practical question is simple: who prepared the accounts, who signed the audit report, and how are those roles kept separate?
How trustees can end up with an in-house audit
Many trustees have never actively chosen their auditor. Their accountant arranged the audit as part of the annual return process, and the trustee may not have seen the auditor’s engagement letter or registration details.
That does not mean the arrangement is necessarily wrong. Many accountants use independent external auditors. But where the auditor is a colleague at the same firm, or part of a related business, independence should be checked carefully.
A useful question to ask your accountant is: “Is the auditor independent from the person or firm preparing the financial statements, and can you confirm the auditor’s SAN?”
ASIC action on in-house SMSF audits
In January 2026, ASIC announced action against 28 SMSF auditors in the first half of the 2025-26 financial year. The actions included cancelling 22 registrations, imposing conditions on 2 auditors and disqualifying 4 auditors.
ASIC also singled out in-house audit independence breaches. Two of the four disqualified auditors were disqualified because ASIC found they continued auditing SMSFs whose financial statements were prepared by staff in their own firm, even after ASIC had previously imposed conditions on their registrations.
ASIC said a 2025 ATO review indicated that up to 800 SMSF auditors may still be performing in-house audits. That makes independence an ongoing compliance focus, not a one-off enforcement story.
You can read ASIC’s release here: ASIC acts against 28 SMSF auditors.
What this means for trustees
The enforcement action is directed at auditors. But trustees can still feel the downstream effect.
If an auditor is deregistered, disqualified or found to have breached independence rules, audit work they performed may be questioned. A fund may need a new auditor to review or redo the work, at the trustee’s cost. The annual return may also be delayed while the issue is resolved.
If your accountant has handled both the accounts and the audit process for years, it is worth asking how independence is maintained. That is a governance check, not an accusation.
Accountant vs auditor: what each role does
The accountant and auditor have different jobs. They may both work on the annual return cycle, but they do not do the same thing.
| Role | Accountant or tax agent | SMSF auditor |
|---|---|---|
| Prepares financial statements | Usually yes | Generally no |
| Lodges the annual return | Usually yes, if appointed as registered tax agent | No |
| Provides the independent audit opinion | No | Yes |
| Signs the independent auditor’s report | No | Yes |
| Can usually be the same person or firm as the other role | No | No |
| Needs ASIC-specific SMSF auditor registration | No | Yes |
The accountant’s role is usually to prepare the financial statements and annual return, then lodge the return with the ATO once the audit is complete.
The auditor’s role is to independently test the evidence and form an opinion. They do not lodge the annual return and should not be treated as the person responsible for preparing the accounts.
Both roles matter. The annual return process works best when they are separate, clearly appointed and given complete records early.
How much does an SMSF audit cost?
The ATO’s SMSF annual overview data reported a median audit fee of $550 for the 2023-24 year, with an average of $651. Just over half of audit fees sat between $500 and $999.
Those figures are sector-wide statistics, not a fixed price list. Actual audit cost depends heavily on fund complexity, record quality and the types of assets held.
| Fund complexity | What it typically includes | Typical audit fee |
|---|---|---|
| Simple | Cash, term deposits, listed shares, ETFs and managed funds | Often around the ATO-reported median |
| Moderate | Property, unlisted holdings, collectables, a loan or a non-related-party LRBA | Often above the median, depending on records and provider pricing |
| Complex | Related-party LRBAs, crypto, several complex holdings, death benefit issues, divorce splits or unresolved contraventions | Commonly quoted individually rather than as a fixed fee |
For a broader view of annual fund costs, see the SMSF Costs and Fees Guide.
When a low audit fee should raise questions
A low fee is not automatically a problem. A simple fund with clean records can be quick to audit.
But a very low fee for a fund with property, borrowings, related-party leases, unlisted investments or incomplete records should be questioned. Those arrangements require more evidence and carry more audit risk.
The question for trustees is not “Can I find the cheapest audit?” It is “Will this audit be independent, properly documented and appropriate for my fund’s complexity?”
The SMSF audit process from appointment to lodgement
The annual audit follows a sequence. Each step depends on the one before it.
Step 1: Appoint the auditor
The auditor must be appointed no later than 45 days before the SMSF annual return is due to be lodged.
The due date depends on the fund’s circumstances and lodgement channel. The examples below are common 2025-26 timing points, but trustees should confirm the specific due date with their tax agent or the ATO’s SMSF annual return lodgement guidance.
| Lodgement situation | Common 2025-26 annual return due date | Auditor appointment point |
|---|---|---|
| Lodging through a registered tax agent, with no overdue prior-year returns | 15 May 2027 | Around 31 March 2027 |
| Self-lodging trustee, with no overdue prior-year returns | 28 February 2027 | Around mid-January 2027 |
| New fund, or fund with an overdue prior-year return | 31 October 2026 | Around mid-September 2026 |
Step 2: Hand over the audit evidence
You, your accountant or your administrator sends the auditor the relevant records. Common audit records include bank statements, broker reports, asset valuations, the investment strategy, trustee minutes, contribution records, pension records, trust deed documents and related-party agreements.
This is where many audit delays begin. Auditors can only verify what they can see. Missing bank statements, unsupported property values, unsigned minutes, incomplete pension records or unclear contribution dates can stop the process until the evidence is provided.
For valuation-specific records, see the ATO’s SMSF valuation guidelines and our SMSF Valuations at 30 June 2026 article.
Step 3: The auditor completes the audit report
The auditor must provide the independent auditor’s report within 28 days after receiving all relevant documents.
The audit has two parts:
- the financial audit, which checks whether the financial statements are supported and materially accurate
- the compliance audit, which checks whether the fund complied with superannuation law during the year
If the auditor identifies a reportable contravention, they must lodge an Auditor Contravention Report with the ATO. The ACR is not just an internal note. It brings the issue to the ATO’s attention.
| Severity | Typical ATO response |
|---|---|
| First-time minor issue | Education letter or reminder |
| Repeated or unresolved issue | Direction to rectify, possible enforceable undertaking or further contact |
| Serious contravention | Administrative penalties payable personally by trustees |
| Systemic or severe non-compliance | Disqualification action or the fund being made non-complying |
A non-complying fund can lose its concessional tax treatment. That is a severe outcome, and it is why trustees should deal with potential issues early rather than waiting for the audit to surface them.
Step 4: Lodge the annual return
Only once the audit is complete can the SMSF annual return be lodged with the ATO.
The annual return includes the auditor’s details and SAN. If lodgement is late or the fund’s status is affected on Super Fund Lookup, the fund may have trouble receiving rollovers or employer contributions.
That is especially relevant under Payday Super, which commenced on 1 July 2026 and links employer super payment timing more closely to pay cycles.
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Can an SMSF skip the audit in a quiet year?
No. Every operating SMSF needs an annual audit, even if the year was quiet.
No contributions, no benefit payments and very few transactions do not remove the audit requirement. A quiet year may make the audit simpler, but the fund still needs an independent audit before the annual return is lodged.
The narrow exception is Return Not Necessary. This can apply where a newly registered SMSF never actually started operating, usually because it never received assets or contributions. It is not an exception for established funds that simply had a low-activity year.
If your fund has ever held assets, assume the annual audit requirement applies unless the ATO or your SMSF specialist confirms otherwise.
Frequently Asked Questions
Who can audit an SMSF in Australia?
Only an approved SMSF auditor registered with ASIC and holding a current SMSF Auditor Number can audit an SMSF. The auditor must also be independent of the fund and independent of the accounting work they are auditing.
Can my accountant do my SMSF audit?
Generally no. If your accountant or their firm prepares your SMSF’s financial statements, they usually cannot also audit the same fund. APES 110 allows only a narrow routine-or-mechanical exception, and trustees should not assume it applies without checking.
How do I check if my SMSF auditor is registered?
Use ASIC’s Professional Registers Search. Search the auditor’s name or SAN to confirm current registration status and any conditions.
How much should an SMSF audit cost?
The ATO’s 2023-24 annual overview reported a median SMSF audit fee of $550 and an average of $651. Simple funds with cash and listed investments may sit near the median. Funds with property, borrowings, related-party arrangements, crypto or unlisted investments usually cost more.
When does the SMSF auditor need to be appointed?
At least 45 days before the SMSF annual return is due to be lodged. For many funds lodging through a registered tax agent with no overdue prior-year returns, the 2025-26 annual return due date is 15 May 2027, which puts the 45-day appointment point around 31 March 2027.
What happens if I do not get my SMSF audited?
The annual return cannot be lodged properly without a completed audit. Late lodgement can result in ATO penalties, affect the fund’s status on Super Fund Lookup and disrupt rollovers or employer contributions.
What is an Auditor Contravention Report?
An Auditor Contravention Report is a formal report the SMSF auditor lodges with the ATO when a breach meets the ATO’s reporting criteria. It can trigger ATO review, education, rectification action, administrative penalties or more serious compliance action depending on the breach.
Does my SMSF need an audit every year, even if nothing happened?
Yes. Every operating SMSF needs an annual audit, even where there were no contributions, benefit payments or major transactions. The Return Not Necessary exception is for a newly registered fund that never started operating, not for an established quiet fund.
What is the difference between the financial audit and the compliance audit?
The financial audit checks whether the fund’s financial statements are supported by evidence and materially accurate. The compliance audit checks whether the fund complied with superannuation law during the year, including contributions, pensions, investment strategy, related-party dealings and fund structure.
Can the auditor help fix problems before reporting them to the ATO?
The auditor’s role is independent. They can request evidence and explain audit findings, but trustees should work through possible rectification with their accountant, tax agent, lawyer or SMSF specialist before the audit begins.
This is general information only. This newsletter is for educational purposes only and does not constitute financial, tax, legal or audit advice. Consider speaking with a licensed financial adviser, registered tax agent, lawyer or SMSF specialist before making decisions about your fund.