For most people the word "audit" arrives with a knot in the stomach. In practice, a routine independent audit is closer to a structured health check: a registered auditor verifies that your numbers are right and your obligations are met, then says so in writing. Done well, it protects you; trustees, committee members and directors all rely on that signature.
Who needs one
- Every SMSF, every year, no exceptions
- Real estate and legal trust accounts, under state regulations
- Incorporated associations and charities above reporting thresholds
- Small companies in particular circumstances, or when shareholders require it
What the auditor actually checks
Two things, broadly: that the financial statements fairly present reality (existence of assets, accuracy of balances, completeness of income) and that the entity complied with the rules that govern it: super law for SMSFs, trust account regulations, ACNC requirements for charities. Auditors test evidence: bank confirmations, title searches, valuations, minutes.
How to make it painless
- Reconciled accounts before the auditor starts, not during
- Bank statements, contracts and valuations filed and findable
- Minutes for the decisions the rules require you to make
- Respond to queries promptly; most audit delays are waiting, not checking
Findings are not failures
A good auditor surfaces issues early, while they are fixable; that is the value. We scope clearly, test thoroughly, and write reports humans can read, with issues raised as options to resolve rather than buried in technical language at the end.